According to a recent poll of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of councils will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week also found council budgets being strained by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
