Based on a new study of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week also found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (IMD) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted 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 underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
