Based on a recent 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 assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated 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 central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
