Based on a latest poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to sell assets 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 shore up their budgets, but they contend they must proceed 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 quick sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
