Based on a latest study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week further found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
