Based on a latest study of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
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 majority (60%) of local leaders said they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
This research of councils in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will need to raise council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (IMD) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
