According to a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
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, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils this week further found council budgets being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials 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 impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
