Local councils across England are being pushed to the financial brink, with many now planning emergency sales of public assets—including social clubs, sports centres, and shopping arcades—simply to keep their services running and avoid declaring effective bankruptcy.
The Scale of the Financial Crisis
A revealing survey of the Key Cities group, which represents major urban areas in England, has uncovered the desperate measures being considered. 60% of these councils are now actively planning to sell off property and land to generate cash. This marks a significant shift from earlier in the year, when most councils hoped to rely on redesigning services and spending their financial reserves.
The primary driver of this crisis is the relentlessly escalating cost of providing statutory services. Councils are legally obliged to fund adult social care, children's services, and support for those with special educational needs and disabilities (SEND). The financial burden from these areas has become unsustainable for many local authorities.
Case Study: Medway Council's £20m Plan
The situation in Medway, Kent, provides a clear example of the trend. The council has confirmed a property management strategy that will see a shopping centre in Rainham and a social club in Rochester sold off. Even income-generating assets like Gillingham golf club and business parks in Worcestershire and Suffolk are on the block.
This fire sale is expected to raise £20 million over five years. Vince Maple, the leader of Medway Council, explained the dire circumstances, stating, "We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency." He highlighted a 91% cut in the council's central government revenue support grant between 2010 and 2024, leaving them with few options.
Broader Impacts and Community Consequences
The financial pressure is not limited to asset sales. The survey also found that over 70% of Key Cities councils will have to raise council tax next April to cover the costs of essential services, rising homelessness, and the chronic housing shortage.
This crisis is hitting the most deprived areas the hardest. According to the latest indices of deprivation, member cities like Hull, Bradford, Stoke-on-Trent, Sunderland, and Wolverhampton rank among the top 30 most deprived in England. Michael Mordey, leader of Sunderland City Council, warned of "impossible choices" without a fairer funding system from central government.
The consequences are already being felt on the ground. The survey confirmed that a fifth of councils have already cut or compromised their social care provision in the last 12 months. With the County Councils Network predicting annual council deficits will reach £4.4 billion by 2029, the situation is set to worsen without significant intervention.
