According to a recent study of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.
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 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and demand,” said a council leader.
“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.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
