According to a new study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities this week also found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking 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.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
