🔗 Share this article

According to a recent survey of municipal councils, English councils are preparing to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.

Increasing Financial Pressures Drive Asset Sales

The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.

Councils have previously come under fire for selling public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.

This coalition said that a high proportion of councils seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”

Detailed Examples of Planned Disposals

Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.

• Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.

Council Tax Rises and Wider Financial Strains

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.

The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.

He added: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”

Countrywide Trends and Forecasts

Research of regional authorities this week also found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.

A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.

Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.

Deprivation and Funding Shortfalls

Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were included in the most deprived in the country.

• “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.

“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the report concluded.

“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.

“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”

One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.