Based on a new poll of municipal councils, English councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent said its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
