Based on a latest survey of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently also found local finances being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions 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 care services in the last year, the survey found.
