🔗 Share this article

According to a new survey of municipal councils, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.

Growing Fiscal Challenges Prompt Asset Sales

A coalition of councils for second-tier cities in England stated that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.

Local governments have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to weather growing financial challenges.”

Specific Examples of Proposed Sales

Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.

• A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.

Local Levy Increases and Broader Financial Pressures

The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next spring to address 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, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said a council leader.

He added: “There are demographic pressures which will continue to add to 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.”

National Patterns and Projections

Research of regional authorities this week also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.

A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.

Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.

Disadvantage and Funding Gaps

According to the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most disadvantaged in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.

“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across key cities in the next twelve months,” the report added.

“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.

“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”

One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.