Based on a recent study of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling 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 councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent said its property management strategy included the sale of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being stretched by the growing number of children and adults needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking 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.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.
