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According to a new survey of municipal councils, English councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils for major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.

Local governments 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 noted that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”

Detailed Examples of Planned Disposals

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

• A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.

Local Levy Rises and Broader Financial Pressures

This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.

The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.

He added: “We face population challenges which will persist to add to 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.”

National Trends and Projections

Research of regional authorities recently further found local finances being stretched by the increasing figures of children and adults needing Send support.

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

Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those changes has been postponed.

Deprivation and Funding Gaps

Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.

• “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.

“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.

“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” said a council leader.

“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”

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