Based on a latest poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using savings to weather growing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the study revealed.
