Based on a latest study of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
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 asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage 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 Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
