According to a latest survey of municipal councils, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the 2025 IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
