🔗 Share this article

According to a recent survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.

Increasing Financial Challenges Drive Asset Sales

The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.

Local governments have previously come under fire for selling public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.

The group noted that a significant number of authorities seeking to generate funds 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 focus on service redesigns and using financial reserves to manage growing financial challenges.”

Specific Examples of Proposed Disposals

One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.

Local Levy Rises and Wider Fiscal Pressures

This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.

The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.

“We are adopting creative strategies but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.

He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

Countrywide Patterns and Projections

Research of regional authorities this week also found local finances being strained by the growing number of young people and older individuals 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 cope with increased demand.

Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.

Deprivation and Financial Gaps

Based on the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.

• “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.

“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the analysis added.

“Council officials 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.

“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”

A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.