Based on a latest survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next April to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
