Based on a recent survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils this week further found local finances being strained by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
