According to a latest poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
