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 rapid disposal of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next April to address the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
