Based on a latest survey of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, 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 deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase 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.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Without 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 local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
