According to a new survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to increase council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures 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 Projections
A survey of regional authorities recently also found local finances being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
