According to a latest poll of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils recently also found council budgets being stretched by the growing number of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing 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 funding system that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the study found.
