Based on a new poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after sharp increases 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 certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
