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

Growing Fiscal Pressures Drive Asset Sales

A coalition of councils for major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.

The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”

Specific Examples of Proposed Sales

Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.

• A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.

Council Tax Rises and Broader Financial Strains

This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.

Medway council explained it will proceed with asset sales after steep rises 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 some of these take time to deliver both better provisions and cost efficiency,” stated Vince Maple.

He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”

Countrywide Patterns and Forecasts

A survey of regional authorities this week further found council budgets being strained by the increasing figures of children and adults needing Send support.

The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.

Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.

Disadvantage and Financial Gaps

Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in England.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.

“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the analysis added.

“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.

“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”

A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.