Based on a recent survey of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy included 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.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“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 demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
