Based on a recent survey of local authorities, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
