According to a new study of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area 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 scale of challenges confronting local leaders across key cities 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 responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
