According to a latest poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils this week further found local finances being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
