According to a new study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
