According to a new poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
