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Based on a new survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.

Growing Financial Challenges Prompt Asset Sales

The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.

Local governments have previously faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.

The group said that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and using savings to weather growing financial challenges.”

Detailed Examples of Planned Sales

Medway Council in southeast England announced its property management strategy included the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.

• Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.

Local Levy Increases and Broader Financial Strains

The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.

Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated a council leader.

He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”

National Trends and Projections

Research of regional authorities this week further found local finances being stretched by the growing number of children and adults requiring Send support.

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 Send system until the coming year after a policy document setting out those reforms was recently delayed.

Deprivation and Financial Gaps

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

• “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.

“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.

“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.

“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”

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