According to a recent poll of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found local finances being stretched by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Participating urban centers 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 countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
