Based on a recent survey of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
