According to a latest survey of local authorities, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates 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 adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently also found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
