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According to a recent poll of local authorities, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.

Increasing Fiscal Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.

Councils have in the past come under fire for selling public land and land to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition said that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising savings to weather growing financial challenges.”

Detailed Cases of Proposed Sales

Medway Council in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.

Council Tax Increases and Wider Fiscal Strains

The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.

The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.

“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.

He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

National Trends and Forecasts

Research of county councils this week also found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.

A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.

Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.

Deprivation and Funding Shortfalls

According to the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most deprived in England.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the study.

“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.

“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.

“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”

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