According to a latest poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week also found local finances being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
