According to a new poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a community venue in another town 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 additionally be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently also found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
