According to a recent poll of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent said its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to cover 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 children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
