According to a recent survey of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the growing number of children and adults needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
