According to a latest study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
