According to a recent survey of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover 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 open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
