Based on a new poll of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to 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 several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
