🔗 Share this article

According to a new study of municipal councils, English councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.

Increasing Financial Challenges Drive Asset Sales

A coalition of councils representing major urban areas in the UK reported that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.

Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.

This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”

Specific Examples of Planned Sales

Medway Council in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.

• Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.

Council Tax Rises and Broader Financial Pressures

The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.

Medway council said it will proceed with property disposals 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 some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.

He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”

National Patterns and Projections

A survey of regional authorities recently further found council budgets being stretched by the increasing figures of children and older individuals needing Send support.

A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.

Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.

Deprivation and Financial Gaps

According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in England.

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

“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report added.

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

“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”

One in five of councils have reduced or weakened care services in the last year, the survey revealed.