Based on a new study 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 Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained 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 adopting creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
