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According to a latest survey of local authorities, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.

Increasing Financial Pressures Drive Asset Sales

The Key Cities Group for second-tier cities in England stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.

Local governments have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”

Specific Examples of Planned Disposals

One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.

Council Tax Increases and Broader Financial Strains

This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.

Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.

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

He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”

Countrywide Trends and Projections

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

A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.

Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.

Disadvantage and Funding Shortfalls

Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were among the most deprived in England.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.

“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.

“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.

“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”

A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.