🔗 Share this article

According to a new poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.

Increasing Fiscal Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.

Councils have previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.

The group noted that a significant number of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage growing fiscal pressures.”

Detailed Cases of Planned Disposals

Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.

• Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.

Council Tax Increases and Broader Fiscal Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.

The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.

“We are adopting innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said a council leader.

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 revenue support grant from over the past decade, which is extremely difficult.”

National Trends and Projections

Research of regional authorities this week further found council budgets being strained by the growing number of young people and adults needing special educational assistance.

The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.

Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.

Disadvantage and Funding Shortfalls

According to the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.

• “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.

“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.

“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said a council leader.

“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”

A fifth of local authorities have cut or compromised care services in the last year, the survey found.