According to a new poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent announced 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.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of challenges confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
