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According to a new study of local authorities, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.

Growing Fiscal Pressures Drive Asset Sales

The Key Cities Group representing major urban areas in England reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.

Councils have previously faced criticism for disposing of public land and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.

This coalition noted that a high proportion of councils seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to manage growing financial challenges.”

Detailed Examples of Proposed Disposals

Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.

• A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.

Local Levy Rises and Wider Financial Pressures

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.

The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said Vince Maple.

He added: “We face demographic pressures 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 2010-24, which is very challenging.”

National Patterns and Forecasts

A survey of county councils recently also found council budgets being strained by the growing number of children and older individuals requiring special educational assistance.

A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.

Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.

Deprivation and Financial Shortfalls

Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most disadvantaged in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.

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

“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.

“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”

A fifth of local authorities have cut or compromised care services in the past 12 months, the survey revealed.