According to a new survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number 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 said they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next spring to cover the rising cost of core provisions, 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 children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to increase 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 Trends and Projections
Research of county councils this week also found local finances being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey found.
