According to a new poll of local authorities, English councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
