Based on a new study of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
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 property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England said its property management strategy included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities this week also found local finances being stretched by the growing number of young people and older individuals requiring Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
