Based on a new study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire 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.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a retail complex 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 owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to add to the strains 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 Projections
Research of regional authorities recently also found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers 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 ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
