According to a new survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to raise council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases 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 certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report 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 demand,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
