Based on a recent poll 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 balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) covering UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey found.
