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Based on a latest survey of local authorities, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.

Increasing Fiscal Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.

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 largest share (six in ten) of municipal officials said they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”

Specific Examples of Proposed Sales

One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over five years.

• Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the plan.

Council Tax Rises and Broader Financial Strains

The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of councils will need to raise council taxes next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.

Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

“We are adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.

He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”

National Trends and Forecasts

Research of county councils recently also found local finances being stretched by the increasing figures of young people and adults needing special educational assistance.

The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.

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

Disadvantage and Funding Shortfalls

According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most deprived in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.

“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report added.

“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.

“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”

One in five of councils have cut or compromised care services in the past 12 months, the survey found.