According to a recent study of local authorities, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next April to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found council budgets being strained by the growing number of young people and adults needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in 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 extent of difficulties facing municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
