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Based on a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.

Growing Fiscal Challenges Drive Asset Sales

The Key Cities Group representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.

Councils have previously faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage growing financial challenges.”

Specific Cases of Proposed Sales

One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.

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

Council Tax Rises and Broader Fiscal Strains

This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.

Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said Vince Maple.

He continued: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”

Countrywide Trends and Projections

Research of regional authorities recently further found local finances being strained by the increasing figures of children and adults needing special educational assistance.

A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.

Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.

Disadvantage and Funding Shortfalls

Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in England.

• “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.

“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis concluded.

“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and need,” stated Michael Mordey.

“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”

One in five of councils have cut or compromised care services in the past 12 months, the survey found.