According to a recent survey of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently also found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
