According to a new study of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to increase council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales 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 some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
