According to a new poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils this week also found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study revealed.
