Based on a new survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise council taxes next April to cover the growing cost of essential services, increased rates of homelessness, 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, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently further found local finances being strained by the growing number of young people and older individuals requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
