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Based on a new study of municipal councils, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.

Growing Financial Pressures Prompt Asset Sales

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

Local governments have previously faced criticism for disposing of playing fields and land to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.

This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”

Detailed Cases of Planned Disposals

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

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

Council Tax Rises and Wider Financial Pressures

The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise council taxes next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.

Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.

He continued: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”

Countrywide Trends and Forecasts

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

The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.

Ministers have put off scheduled changes to the Send system until next year after a white paper setting out those changes was recently delayed.

Deprivation and Funding Shortfalls

According to the most recent indices of deprivation (IMD) for UK local authorities, several participating urban areas 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 deprivation indices,” said the study.

“While only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting local leaders across major urban centers 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 addresses the actual extent of disadvantage and need,” said Michael Mordey.

“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”

One in five of councils have cut or compromised social care provision in the past 12 months, the study found.