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According to a recent study of municipal councils, English councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.

Growing Financial Pressures Drive Asset Sales

The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.

Local governments have in the past faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.

The group noted that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”

Detailed Examples of Planned Disposals

One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.

• A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.

Council Tax Rises and Broader Fiscal Strains

The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.

Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.

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 central funding from 2010-24, which is extremely difficult.”

National Trends and Projections

A survey of regional authorities this week further found local finances being strained by the growing number of young people and older individuals needing special educational assistance.

The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple 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 setting out those changes has been postponed.

Disadvantage and Financial Gaps

According to the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.

“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.

“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.

“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”

One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.