Based on a recent survey of local authorities, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will have to increase council taxes next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council 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 adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week also found local finances being strained by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will persist 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 councils have reduced or weakened social care provision in the last year, the study revealed.
