According to a latest study of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising savings to weather increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities this week also found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
