According to a latest survey of local authorities, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing 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 selling public land and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of 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, also found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales 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 some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
