Based on a latest poll of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals 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 taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently also found local finances being strained by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
