Based on a latest study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its property management strategy featured the sale of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial 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 need to raise local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead 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 certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities recently further found council budgets being strained by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study found.
