Based on a new study of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported 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 support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities recently also found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
