According to a new survey of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“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 scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
