According to a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to increase 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.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
