According to a new study of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next April to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase 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.”
Countrywide Patterns and Projections
Research of regional authorities this week further found local finances being strained by the growing number of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in 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 deprivation indices,” said the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
