🔗 Share this article

According to a latest survey 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.

Growing Fiscal Pressures Drive Asset Sales

The Key Cities Group for second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.

Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.

This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to weather growing financial challenges.”

Specific Cases of Proposed Sales

Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.

• A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.

Council Tax Increases and Wider Financial Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.

The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are adopting creative strategies but certain measures take time to achieve both improved services and financial savings,” stated a council leader.

He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”

Countrywide Patterns and Forecasts

A survey of county councils this week further found local finances being strained by the growing number of young people and adults requiring special educational assistance.

The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.

Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.

Disadvantage and Financial Shortfalls

According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in the country.

• “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.

“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.

“Local government leaders 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, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”

One in five of councils have reduced or weakened care services in the last year, the study revealed.