According to a latest poll of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently also found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
