According to a recent study of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated 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.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “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 Sales
Medway Council in southeast England announced its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities this week also found council budgets being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
