According to a recent survey of local authorities, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed 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 take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to increase the pressures 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 further found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
