Based on a new survey of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils recently also found local finances being strained by the growing number of young people and adults requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
