Based on a new study of municipal councils, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, 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 a council leader.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, 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 strained by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
