According to a new study of municipal councils, English councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
