According to a new survey of municipal councils, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of young people and older individuals needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
