According to a recent survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to support 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 councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
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 another town to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority 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 temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue 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 very challenging.”
National Trends and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
