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Based on a recent survey of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.

Growing Fiscal Pressures Drive Asset Sales

A coalition of councils for second-tier cities in England stated that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.

Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.

The group noted that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”

Detailed Examples of Planned Sales

Medway Council in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.

• Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.

Council Tax Increases and Broader Fiscal Strains

This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.

Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.

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

He continued: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”

National Patterns and Forecasts

A survey of regional authorities recently also found council budgets being stretched by the growing number of children and older individuals requiring 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 rising needs.

Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.

Disadvantage and Funding Gaps

According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in England.

• “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.

“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.

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

“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”

A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.