Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to raise £20m 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 disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to raise council taxes next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will proceed 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 adopting creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found local finances being strained by the growing number of young people and adults 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 grapple to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures 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 equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
