According to a new study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “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 weather growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, 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 deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being strained by the growing number of children and older individuals needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
