Based on a recent poll of municipal councils, English councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to raise local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue 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 very challenging.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
