According to a new study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
