Based on a recent study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases 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 certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “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 over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in 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 data highlights the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
