According to a latest study of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to raise £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 also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises 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 some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey revealed.
