According to a recent poll of local authorities, English councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will need to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 IMD measures,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue 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 cut or compromised care services in the past 12 months, the study revealed.
