According to a latest study 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.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will continue to increase 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.”
National Patterns and Projections
Research of regional authorities this week also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the study revealed.
