According to a latest survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% 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 come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of authorities will have to increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises 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 some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week further found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed 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 (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
