According to a new poll of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed 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 taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and adults needing 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 struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in 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 deprivation indices,” noted the study.
“Although 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 the nation. The data highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
