Based on a latest study of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using savings to manage increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals 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 taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils this week further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
