Based on a latest poll of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system 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 allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
