According to a latest poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises 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 require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members 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 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
