According to a latest survey of municipal councils, English councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
