Based on a new study of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes 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 press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils recently also found local finances being strained by the increasing figures of young people and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several participating urban areas 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 report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the last year, the study revealed.
