Based on a latest study of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated 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.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its property management strategy featured the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, 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, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently further found council budgets being stretched by the growing number of children and adults requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
