Based on a recent study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found local finances being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
