According to a new study of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the disposal 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 provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
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 increase local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those changes 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 the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
