According to a latest survey of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will persist to add to 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.”
Countrywide Trends and Projections
A survey of regional authorities recently also found council budgets being strained 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.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
