Based on a new survey of local authorities, English councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase 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 youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges 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 over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently also found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
