According to a new study of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said 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 the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week also found local finances being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
