According to a new study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet 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 proceed 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 quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases 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 some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist 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 extremely difficult.”
Countrywide Patterns and Projections
Research of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
