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According to a new survey of municipal councils, English councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils for second-tier cities in the UK stated that 60% 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 finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.

The group noted that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”

Detailed Cases of Proposed Disposals

Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.

• A local golf course and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.

Local Levy Increases and Broader Fiscal Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.

Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are adopting innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.

He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”

National Trends and Projections

Research of county councils recently also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.

A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.

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

Disadvantage and Financial Gaps

According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the study.

“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the report added.

“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and demand,” said a council leader.

“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”

A fifth of councils have reduced or weakened care services in the last year, the survey revealed.