According to a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
