According to a latest survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy included the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities this week further found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the 2025 IMD measures,” noted the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
