Based on a latest study 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.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently further found council budgets being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Without 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 communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
