Based on a new study of local authorities, English councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue 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 distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to increase 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 Trends and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
