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According to a recent poll of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.

Increasing Financial Challenges Prompt Asset Sales

The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.

Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.

This coalition said that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”

Specific Examples of Planned Sales

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

• Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.

Council Tax Rises and Wider Fiscal Strains

The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.

The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” said a council leader.

He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Trends and Forecasts

Research of county councils this week further found local finances being strained by the growing number of young people and adults requiring special educational assistance.

The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.

Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.

Disadvantage and Financial Shortfalls

Based on the most recent deprivation measures (IMD) for English councils, 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 across the country under the latest IMD measures,” noted the study.

“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis concluded.

“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated a council leader.

“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”

One in five of councils have reduced or weakened care services in the last year, the survey found.