According to a new poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to increase local levies next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials 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 Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
