Based on a new study of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found council budgets being strained by the increasing figures of young people and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth 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 clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
