According to a new poll of local authorities, English councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent 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 temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged 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 among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study revealed.
