According to a recent poll of local authorities, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
