Based on a recent poll of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle 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 has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
