Based on a new poll of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said 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.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to increase council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to increase 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 very challenging.”
National Trends and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
