Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
