Based on a new study of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the 2025 IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses 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 detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
