Based on a new study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) for English councils, several participating urban areas were among the most disadvantaged 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,” noted the report.
“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 underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
