According to a new poll of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the study revealed.
