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

Growing Financial Pressures Prompt Asset Sales

A coalition of councils representing major urban areas in England reported that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.

Councils have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.

The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”

Detailed Examples of Proposed Disposals

One local authority in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.

• A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.

Local Levy Increases and Wider Financial Strains

This research of councils in the key cities group, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.

The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.

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

He continued: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”

National Trends and Projections

Research of regional authorities this week also found council budgets being strained by the growing number of children and adults requiring Send support.

The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.

Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.

Disadvantage and Financial Shortfalls

Based on the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.

• “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.

“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.

“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and demand,” stated Michael Mordey.

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

A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.