According to a recent study of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
