According to a recent poll of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% 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 open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy featured the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to raise local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
