According to a recent study of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
