Based on a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to increase council taxes next spring to cover the growing 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 children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week further found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders 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 accounts for and addresses the actual extent of deprivation and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study found.
