Based on a recent survey of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and land to support their budgets, but they argue they must continue 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 represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures 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 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
