According to a new survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in England stated 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 faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed 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 taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are 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.”
National Trends and Projections
A survey of county councils recently also found local finances being strained by the growing number of young people 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 put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials 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 need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
