🔗 Share this article

According to a new study of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.

Increasing Financial Challenges Drive Asset Sales

A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.

Councils have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.

The group said that a significant number of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”

Detailed Cases of Planned Sales

One local authority in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.

• A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.

Local Levy Rises and Wider Financial Pressures

This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.

The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.

“We are adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” stated a council leader.

He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

National Patterns and Projections

A survey of regional authorities this week also found council budgets being strained by the growing number of young people and adults requiring Send support.

The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.

Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.

Disadvantage and Funding Gaps

Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, 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 most deprived 30 across the country under the latest IMD measures,” noted the study.

“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.

“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.

“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”

One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.