According to a recent survey of local authorities, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found local finances being stretched by the increasing figures of children and adults requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in 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 figures underscores the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
