According to a latest survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils this week further found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey found.
