Based on a new survey of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the sale of a retail complex in Rainham 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 provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
