According to a new survey of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a significant number of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring 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 steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities this week further found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“Although 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 the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
