According to a latest survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of local authorities are intending to sell assets to meet 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 land to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- A local golf course 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 Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils recently further found council budgets being stretched by the growing number of children and adults requiring 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 struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
