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According to a new study of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.

Growing Fiscal Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.

Local governments have previously come under fire for selling public land and land to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.

This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather growing fiscal pressures.”

Detailed Cases of Planned Disposals

Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.

Council Tax Increases and Broader Financial Strains

The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will have to raise local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.

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

“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.

He added: “There are population challenges 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 very challenging.”

National Patterns and Projections

A survey of county councils recently further found council budgets being strained by the increasing figures of children and adults needing special educational assistance.

The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.

Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.

Disadvantage and Funding Shortfalls

Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in the country.

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

“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.

“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and need,” stated a council leader.

“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”

One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.