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According to a new poll 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.

Increasing Fiscal Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.

Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”

Specific Examples of Proposed Sales

One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.

• Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.

Council Tax Increases and Broader Financial Strains

The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.

The authority said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.

He continued: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

Countrywide Patterns and Projections

A survey of county councils recently also found local finances being strained by the increasing figures of children and adults requiring special educational assistance.

The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.

Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.

Deprivation and Funding Gaps

According to the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were among the most deprived in the country.

• “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.

“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.

“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” stated a council leader.

“Lacking this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”

A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.