🔗 Share this article

Based on a recent study of local authorities, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.

Increasing Fiscal Challenges Prompt Asset Sales

The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.

Councils have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”

Specific Cases of Planned Disposals

Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.

Local Levy Increases and Wider Fiscal Strains

This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.

Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.

He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”

Countrywide Trends and Forecasts

Research of county councils recently also found council budgets being stretched by the growing number of young people and older individuals needing Send support.

The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.

Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.

Disadvantage and Financial Shortfalls

According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most disadvantaged in England.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.

“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.

“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” stated a council leader.

“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”

One in five of councils have reduced or weakened care services in the last year, the study found.