Based on a new poll of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
