According to a new survey of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.