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According to a recent survey 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.

Growing Fiscal Pressures Prompt Asset Sales

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

Councils have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.

This coalition noted that a significant number of councils attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”

Specific Cases of Planned Sales

Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the plan.

Council Tax Rises and Wider Fiscal Pressures

The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.

Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.

He continued: “We face demographic pressures 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.”

Countrywide Patterns and Projections

Research of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.

The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.

Government officials have put off scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.

Disadvantage and Financial Gaps

According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several 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 nationally under the latest IMD measures,” said the study.

“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.

“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.

“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”

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