Deepening Financial Distress in England

English councils are increasingly resorting to selling public assets like social clubs, sports centres, and shopping arcades to meet escalating costs, particularly in adult and children’s social care. A survey by the Key Cities group, a network representing 24 mid-sized cities in England and Wales, revealed that 60% of its member councils plan to sell assets to balance their budgets. This marks a significant shift from 2024, when a majority of local leaders prioritized service redesigns and the use of financial reserves to manage fiscal challenges.

The financial strain is rooted in over a decade of reduced central government funding, coupled with soaring demand for statutory services. According to the Institute for Government, funding for local authorities in the 2020s will be lower in real terms than it was two decades prior, forcing councils to cut discretionary services like libraries and leisure centres to fund legally mandated, high-cost services such as social care. UNISON, a public service union, reported that councils in England face a predicted funding gap of £3.4 billion for the 2025/26 fiscal year. The crisis is further compounded by spiralling costs for special educational needs and disability (SEND) provision, which is projected to create a national deficit of £6.6 billion in 2025/26.

As a result, many councils are on the brink of financial collapse. The Public Accounts Committee, a UK parliamentary body, has warned that the local government finance system is in a “perilous state,” with suggestions that up to half of councils could be at risk of effective bankruptcy. To cope, more than 70% of councils in the Key Cities survey anticipate raising council taxes in April 2026. The government has permitted councils to increase core council tax by 3% and an adult social care precept by 2% for the 2025-26 period without a local referendum.

Medway Council in Kent, for instance, plans to raise £20 million over five years by selling a shopping centre, a social club, a golf course, and business parks. Vince Maple, the leader of Medway Council, attributed this to a 91% cut in their revenue support grant between 2010 and 2024, alongside demographic pressures on social care and housing. Similarly, Birmingham City Council is selling off £1.25 billion in assets, including libraries, to repay a government bailout loan after declaring effective bankruptcy.

Parallels for Kenya’s Devolved Governments

The fiscal predicament of English councils presents a valuable lesson for Kenya's 47 county governments. Since the advent of devolution in 2013, counties have faced persistent challenges that mirror those in the UK, including inadequate funding, corruption, and the struggle to deliver essential services. Reports from Kenya's Controller of Budget consistently highlight issues such as delayed fund disbursement from the national government and low own-source revenue generation, which hamper budget implementation.

Like their English counterparts, Kenyan counties are legally mandated to provide critical services, primarily in health and agriculture. However, these devolved functions are often underfunded, leading to public outcry and leadership struggles over budget control. While there isn't a widespread, officially sanctioned trend of counties selling public assets to cover recurrent expenditure, the underlying pressures are similar. The national government's recent move to privatise 11 state-owned enterprises to manage public debt shows a willingness to leverage state assets for fiscal balance, a strategy now being mirrored at the local level in England.

Corruption and mismanagement of public funds remain significant hurdles for Kenyan counties, as noted in numerous Auditor-General reports. This contrasts with the UK situation, where the crisis is driven more by structural funding deficits than by graft. Nonetheless, the outcome for citizens is similar: a potential decline in public services and the loss of community assets. The challenges in both contexts underscore the critical importance of sustainable fiscal models for sub-national governments. Without adequate and predictable funding, devolved units, whether in England or Kenya, are forced into making difficult decisions that can have long-lasting negative impacts on communities.

As Kenya continues to navigate its devolution journey, the experience of English councils serves as a stark warning. It highlights the need for a robust framework for public asset management, transparent financial oversight, and a sustainable funding mechanism from the national government to ensure that county governments can deliver on their mandate without being forced to sell off the "family silver" to stay afloat.