Based on a new survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals 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 certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being strained by the growing number of children and adults requiring Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
