According to a new survey of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Pressures
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers 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 nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
