According to a latest poll of municipal councils, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services 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 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week also found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) for English councils, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
