According to a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of councils will have to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils this week also found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged 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,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey revealed.
