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Based on a new poll of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.

Growing Financial Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Local governments have previously come under fire for selling playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.

The group noted that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”

Detailed Examples of Proposed Disposals

Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.

• A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.

Council Tax Increases and Broader Financial Strains

The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.

The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.

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

He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”

National Trends and Projections

A survey of regional authorities recently further found local finances being strained by the growing number of young people and older individuals needing special educational assistance.

The County Councils Network projected that council deficits 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 setting out those reforms has been postponed.

Disadvantage and Funding Gaps

According to the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most deprived in the country.

• “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” said the study.

“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.

“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.

“Lacking this, councils will continue to face difficult decisions around which vital provisions 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 last year, the survey revealed.