According to a recent survey of local authorities, 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 Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities this week further found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the 2025 deprivation indices,” noted the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
