According to a new survey of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Broader Financial Strains
This research of councils in the coalition, 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 growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils this week further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several 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 across the country under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, 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 revealed.
