Based on a recent poll of local authorities, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue 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 holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will need to increase council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” stated 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 drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the 2025 IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
