Based on a new survey of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent said its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of county councils recently also found local finances being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
