According to a recent survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said 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 Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week also found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across major urban centers 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 real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
