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Based on a new survey of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.

Increasing Financial Challenges Drive Asset Sales

The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.

Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

The group noted that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”

Detailed Cases of Planned Sales

Medway Council in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a social club in another town to raise 20 million pounds over the next half-decade.

• A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.

Local Levy Increases and Wider Financial Strains

The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.

Medway council said it will proceed with property disposals 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 some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.

He continued: “We face demographic pressures 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 over the past decade, which is very challenging.”

Countrywide Trends and Forecasts

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

A network of councils projected that local shortfalls 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 Send system until the coming year after a policy document setting out those reforms has been postponed.

Deprivation and Funding Shortfalls

Based on the latest indices of deprivation (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.

• “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.

“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.

“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” stated a council leader.

“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”

One in five of councils have reduced or weakened social care provision in the last year, the study found.