According to a recent poll of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds 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 sold under the plan.
Council Tax Rises and Broader Financial 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 councils will have to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being strained by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
