Based on a recent study of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
