Based on a recent study of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning 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 open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently further found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.