Based on a recent poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its property management strategy included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Broader Financial 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 raise council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week further found local finances being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
