Based on a new poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and using savings to manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week further found local finances being stretched by the growing number of children and adults needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
