Based on a new study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England said its property management strategy included the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which includes several urban centers, also 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 housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found local finances being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent deprivation measures (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking 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 past 12 months, the survey found.
