Based on a latest survey of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten 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 open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, 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 Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
