According to a recent survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently also found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
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 rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
