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Based on a new survey of municipal councils, 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

A coalition of councils for second-tier cities in England reported that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.

Councils have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.

The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”

Specific Examples of Planned Disposals

Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.

• Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.

Council Tax Increases and Wider Fiscal Pressures

The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.

The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are adopting creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.

He continued: “There are population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Patterns and Forecasts

Research of regional authorities recently also found local finances being strained by the increasing figures of children and adults requiring Send support.

A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.

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

Disadvantage and Financial Shortfalls

According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many 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 top 30 across the country under the latest IMD measures,” noted the report.

“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.

“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.

“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”

One in five of local authorities have reduced or weakened social care provision in the last year, the survey revealed.