Based on a recent study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities recently further found local finances being strained by the growing number of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
