Based on a new survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures 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 extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
