Based on a new poll of municipal councils, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales 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 taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
