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According to a new survey of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.

Growing Financial Pressures Drive Asset Sales

The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.

Local governments have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.

This coalition said that a significant number of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”

Specific Examples of Proposed Disposals

Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.

• A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.

Council Tax Increases and Broader Financial Strains

The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.

Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

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

He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Trends and Projections

A survey of regional authorities recently also found council budgets being stretched by the growing number of young people and adults needing special educational assistance.

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

Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.

Disadvantage and Financial Gaps

Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in England.

• “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.

“While only one key city is among the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.

“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.

“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”

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