Based on a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to sell assets to meet 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 argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need 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 sharp increases 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 cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the top 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, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
