According to a latest poll of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after sharp increases 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 take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
