Based on a latest poll 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 balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently also found local finances being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
