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Based on a new poll of local authorities, English councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.

Growing Financial Challenges Prompt Asset Sales

A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.

The group said that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to manage growing fiscal pressures.”

Detailed Examples of Planned Disposals

Medway Council in Kent said its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.

Council Tax Increases and Broader Fiscal Pressures

This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.

Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” stated a council leader.

He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”

Countrywide Patterns and Forecasts

Research of regional authorities this week also found council budgets being strained by the growing number of children and older individuals needing special educational assistance.

A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.

Government officials have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.

Disadvantage and Funding Shortfalls

Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in the country.

• “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.

“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone 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.

“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.

“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”

A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.