According to a recent survey of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next spring to cover the growing 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 sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, 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 changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
