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Based on a recent poll of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.

Increasing Financial Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in England 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 come under fire for disposing of public land and land to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or face insolvency.

This coalition noted that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”

Specific Examples of Proposed Sales

Medway Council in southeast England said its property management strategy included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over five years.

• Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.

Local Levy Rises and Wider Financial Pressures

The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.

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, elderly and disability services, and short-term housing.

“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.

He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut 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 adults requiring Send support.

A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.

Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes has been postponed.

Deprivation and Financial Gaps

Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.

“While only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report concluded.

“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.

“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”

A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.