🔗 Share this article

Based on a new survey of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.

Increasing Financial Pressures Drive Asset Sales

A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.

Councils have in the past faced criticism for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.

This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”

Specific Cases of Planned Sales

One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.

• A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.

Council Tax Rises and Broader Financial Pressures

The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.

The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.

“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” 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 central funding from 2010-24, which is extremely difficult.”

National Patterns and Projections

Research of county councils recently also found council budgets being stretched by the increasing figures of young people and adults requiring Send support.

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

Ministers have put off planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.

Deprivation and Financial Gaps

According to the latest deprivation measures (IMD) for UK local authorities, several key cities members were included in the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.

“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting municipal officials across major urban centers in the coming year,” the report added.

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

“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”

One in five of local authorities have cut or compromised care services in the last year, the survey revealed.