Based on a latest survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales 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 adopting creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Ministers 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.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
