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According to a new survey of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.

Growing Fiscal Challenges Drive Asset Sales

A coalition of councils representing second-tier cities in England stated that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.

Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.

The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”

Specific Cases of Planned Sales

One local authority in Kent said its property management strategy featured the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over five years.

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

Council Tax Rises and Wider Financial Pressures

This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.

The authority said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are taking creative strategies but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.

He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”

Countrywide Patterns and Forecasts

A survey of county councils recently also found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.

The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.

Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.

Disadvantage and Funding Gaps

Based on the latest indices of deprivation (IMD) for English councils, 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 IMD measures,” said the study.

“While only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report added.

“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.

“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”

One in five of councils have cut or compromised social care provision in the last year, the survey revealed.