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Based on a new study of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.

Growing Financial Pressures Prompt Asset Sales

A coalition of councils for major urban areas in England stated that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.

Councils have previously faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.

This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”

Detailed Cases of Planned Sales

Medway Council in southeast England said its asset disposal plan included the sale 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 held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.

Council Tax Rises and Broader Fiscal Pressures

This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.

Medway council explained it will proceed 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 taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated Vince Maple.

He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”

National Patterns and Projections

Research of regional authorities recently also found council budgets being stretched by the growing number of young people and adults needing special educational assistance.

The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.

Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.

Disadvantage and Financial Gaps

Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.

• “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.

“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across key cities in the next twelve months,” the report added.

“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.

“Without this, local authorities will persist to face difficult decisions 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 cut or compromised social care provision in the last year, the study found.