According to a recent survey of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said 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 taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” said the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
