According to a recent study of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to 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 Patterns and Forecasts
A survey of county councils recently also found local finances being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. 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 clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions 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 revealed.
