Based on a new poll of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, 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 seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using savings to weather growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will need to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found local finances being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices 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 care services in the past 12 months, the study revealed.
