Based on a new study of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently further found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
