According to 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 assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “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,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
