According to a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week also found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
