According to a new study of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue 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.”
National Patterns and Projections
A survey of county councils this week further found local finances being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
