Based on a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
