According to a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently further found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
