Based on a new survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of county councils recently also found council budgets being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study found.
