Based on a latest poll of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, 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 growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said 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 short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
