According to a new study of municipal councils, English councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study revealed.
