According to a new survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its property management strategy included the disposal of a retail complex 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 two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that over seven in ten of councils will have to increase local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are demographic pressures 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 over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
