According to a latest study of municipal councils, English councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the survey revealed.
