Based on a new survey 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.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Cases of Planned 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 £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Pressures
The survey 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 raise council taxes next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in 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 IMD measures,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
