Based on a recent poll of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Challenges 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 dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy included the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the growing number of children and older individuals needing special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
