Based on a latest poll of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise council taxes next April to cover the growing cost of essential services, 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 youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week further found local finances being stretched by the growing number of children and adults requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
