Based on a new study of local authorities, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face 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.”
Countrywide Trends and Forecasts
A survey of regional authorities recently further found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study revealed.
