Based on a new survey of local authorities, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- 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 Broader Financial Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to 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 Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials 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 need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
