Based on a latest survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place 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 countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
