According to a new poll of local authorities, English councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will have to raise council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the last year, the study found.
