Based on a recent study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for 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 rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While 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 figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
