According to a new poll of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found local finances being stretched by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
