According to a latest poll of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges 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 extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week further found council budgets being stretched by the increasing figures of children and older individuals requiring Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the survey revealed.
