According to a new poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the sale of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, 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,” said a council leader.
He added: “There are demographic pressures which will persist to increase the strains 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 growing number of young people and adults requiring special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
