Based on a new study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
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 planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face 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 regional authorities recently further found council budgets being strained by the increasing figures of children and adults needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
