According to a latest study of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
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 service redesigns and utilising savings to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction 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 local finances being strained by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place 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 countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
