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Based on a recent 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 properties to balance the books.

Growing Financial Pressures Prompt Asset Sales

The Key Cities Group representing major urban areas in England reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.

Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.

This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”

Specific Examples of Proposed Sales

One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.

• A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.

Council Tax Rises and Wider Financial Strains

The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.

Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.

He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Trends and Projections

Research of county councils recently also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.

A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.

Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.

Deprivation and Financial Shortfalls

According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.

“While only a single urban area is in 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 highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis added.

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

“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.”

One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.