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According to a new study of local authorities, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.

Increasing Financial Challenges Prompt Asset Sales

A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.

Councils have previously faced criticism for selling public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.

This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”

Specific Cases of Proposed Sales

Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to generate 20 million pounds 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 also be disposed of under the strategy.

Council Tax Increases and Broader Financial Pressures

This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.

Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are taking innovative approaches but some of these take time to achieve both improved services and financial savings,” said Vince Maple.

He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”

National Trends and Forecasts

A survey of regional authorities recently further found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.

The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.

Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.

Deprivation and Funding Shortfalls

Based on the most recent deprivation measures (IMD) for English councils, several key cities members were included in the most disadvantaged in England.

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

“While only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.

“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” said a council leader.

“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”

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