According to a latest poll of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally 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 have to raise council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase 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 Projections
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
