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According to a recent study of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.

Growing Fiscal Challenges Drive Asset Sales

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

Local governments have in the past come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.

The group said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”

Specific Examples of Planned Disposals

One local authority in Kent said its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to raise £20m over the next half-decade.

• Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.

Council Tax Rises and Wider Financial Pressures

This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.

The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.

“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.

He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”

National Trends and Forecasts

Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.

A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.

Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.

Deprivation and Funding Shortfalls

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

• “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.

“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of challenges confronting municipal officials across key cities in the next twelve months,” the report added.

“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.

“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”

A fifth of councils have cut or compromised care services in the last year, the study found.