Based on a new survey of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to increase local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
