According to a recent survey of local authorities, English councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being strained by the increasing figures 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 grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
