Based on a latest survey of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week also found council budgets being stretched by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
