According to a recent study of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Cases of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are 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 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
