Based on a latest study of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England stated that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will persist 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 extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming 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) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
