According to a latest survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities recently further found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
