According to a new survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
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 cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
