According to a new study of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider 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 have to increase council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 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, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
