According to a latest study of local authorities, English councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, 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 cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils recently also found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services 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 survey found.
