Based on a new survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise 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 strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
