Based on a latest study of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent said its property management strategy included the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
