According to a new poll of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
