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Based on a recent study of municipal councils, English councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils representing second-tier cities in the UK stated that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.

The group said that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”

Specific Examples of Proposed Sales

One local authority in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over five years.

• A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.

Council Tax Rises and Broader Financial Strains

The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.

The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.

He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”

Countrywide Trends and Projections

A survey of county councils this week also found local finances being stretched by the increasing figures of children and older individuals requiring Send support.

The County Councils Network projected 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 special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.

Deprivation and Funding Shortfalls

According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in England.

• “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.

“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of challenges facing municipal officials across key cities in the next twelve months,” the report added.

“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.

“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”

One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.