According to a recent survey of municipal councils, English councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing 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 cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures 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 Forecasts
A survey of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the 2025 IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study revealed.
