Based on a recent poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains 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.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will persist 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 reduced or weakened social care provision in the past 12 months, the study revealed.
