According to a recent poll of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
