Based on a latest study of municipal councils, English councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils this week also found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study revealed.
