Based on a recent poll of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils 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 open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in Kent announced its property management strategy featured the sale 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 business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will need to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises 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 some of these require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found council budgets being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in 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 report.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
