According to a latest survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Broader Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
