According to a new survey of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue 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 also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found council budgets being strained by the growing number of young people and older individuals needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
