Based on a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to generate £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 also be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of councils will have to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of young people and adults needing Send support.
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 rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” 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.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
