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Based on a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.

Increasing Fiscal Pressures Prompt Asset Sales

The Key Cities Group for major urban areas in England reported that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.

Councils have in the past faced criticism for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.

This coalition said that a significant number of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”

Detailed Examples of Proposed Disposals

Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.

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

Local Levy Rises and Broader Financial Pressures

The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to increase local levies next April to cover the growing cost of essential services, increased rates 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, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.

He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

Countrywide Trends and Forecasts

A survey of regional authorities this week also found local finances being strained by the increasing figures of children and adults requiring Send support.

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

Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.

Deprivation and Funding Shortfalls

According to the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were among the most deprived in England.

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

“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report added.

“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.

“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”

One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.