Based on a recent poll of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of councils in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales 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 creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
