According to a recent poll of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds 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 strategy.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
