According to a latest poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to increase 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
Research of regional authorities recently also found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
