According to a new poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” said Vince Maple.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in England.
- “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.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
