Based on a latest poll 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 balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals 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 adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week further found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“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 residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
