Based on a new survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges 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 over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week further found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
