Based on a latest poll of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to raise council taxes next April to address the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently also found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey revealed.
