According to a latest survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to raise local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of county councils this week further found council budgets being strained by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (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 place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
