According to a recent study of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures 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 Projections
Research of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking 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 councils have reduced or weakened social care provision in the last year, the study revealed.
