According to a latest study of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the 2025 IMD measures,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale 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 accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
