According to a recent poll of municipal councils, English councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy included the sale of a shopping centre in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently also found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for 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 place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the study found.
