Based on a new study of municipal councils, English councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling public land and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will persist 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
Research of regional authorities this week also found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
