Based on a new study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Wider Fiscal Pressures
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 need to increase local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week further found local finances being strained by the increasing figures of young people and older individuals needing 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 cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
