Based on a recent survey of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week further found local finances being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
