Based on a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
