Based on a new survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to increase council taxes next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being strained by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several key cities members were among the most disadvantaged 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 a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities 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 councils have reduced or weakened social care provision in the last year, the survey found.
