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According to a latest study of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.

Increasing Fiscal Challenges Drive Asset Sales

The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.

Local governments have in the past come under fire for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.

The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”

Detailed Examples of Planned Disposals

One local authority in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over five years.

• A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.

Council Tax Rises and Wider Financial Strains

The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.

Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.

He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”

Countrywide Trends and Projections

Research of county councils recently further found council budgets being strained by the growing number of children and adults requiring Send support.

The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.

Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.

Deprivation and Funding Gaps

Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged 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 report.

“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis concluded.

“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.

“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”

A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.