According to a new survey of local authorities, 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 Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Pressures
This research of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed 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 adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey revealed.
