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 rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.