According to a new study of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed 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 some of these require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
