According to a new survey of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week further found local finances being stretched by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study found.
