According to a latest poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to increase the strains 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 regional authorities recently also found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities 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 care services in the last year, the study found.
