According to a new poll of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England stated that 60% of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
