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Based on a latest survey of municipal councils, English councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.

Increasing Financial Pressures Prompt Asset Sales

A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.

Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.

This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”

Specific Examples of Proposed Disposals

One local authority in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a social club in Rochester to raise £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 additionally be sold under the strategy.

Council Tax Increases and Broader Fiscal Pressures

This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.

The authority explained 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 taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.

He continued: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Trends and Projections

A survey of regional authorities recently also found local finances being strained by the growing number of young people and adults needing Send support.

A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.

Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.

Deprivation and Funding Gaps

According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in the country.

• “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.

“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the report added.

“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” said Michael Mordey.

“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”

One in five of councils have reduced or weakened social care provision in the last year, the study revealed.