Based on a new study of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist 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 extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering UK local authorities, many 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 top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
