Based on a new poll of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Strains
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to raise local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils recently also found local finances being stretched by the increasing figures of children and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
