According to a new survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
