Based on a new poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to manage growing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in Kent said its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next April to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council 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 creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found local finances being stretched by the growing number of children and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
