According to a latest survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said 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 adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members 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 report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
