According to a latest study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue 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 assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will need to raise local levies next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained 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 some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found local finances being strained 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 2029, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, several key cities members were among 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,” said the study.
“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 England. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
