According to a new survey of municipal councils, English councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
