Based on a new poll of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said 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 innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
