According to a new poll of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and using savings to manage growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges 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 over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found local finances being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
