According to a recent study of local authorities, English councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales 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 certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist 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 Projections
A survey of county councils this week further found council budgets 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 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey found.
