According to a new poll of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges 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 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
