According to a new poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils recently further found local finances being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the study revealed.
