Based on a recent survey of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and land to support their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next spring to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals 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 some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
