Based on a latest study of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported 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 disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
