Based on a latest study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
