According to a new survey of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will persist to increase 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 Trends and Projections
Research of regional authorities this week further found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities 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 report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study found.
