Based on a latest survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist 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.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey found.
