According to a latest survey of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to raise local levies next spring to address the rising cost of essential services, 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, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle 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 has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study revealed.
