Based on a latest study of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will need to increase local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week further found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
