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According to a recent survey of municipal councils, English councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.

Increasing Fiscal Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in England reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.

Councils have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.

This coalition noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using savings to manage growing financial challenges.”

Specific Cases of Proposed Disposals

Medway Council in southeast England said its property management strategy included the sale of a shopping centre 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 generate rent for Medway council, will additionally be sold under the strategy.

Council Tax Increases and Wider Financial Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.

The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.

He added: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Trends and Projections

Research of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing Send support.

A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.

Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.

Disadvantage and Financial Gaps

According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.

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

“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the report added.

“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.

“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”

One in five of local authorities have reduced or weakened care services in the last year, the study found.