Based on a latest poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with asset sales 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 adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
