According to a new survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending 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 support their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
