According to a new study of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up 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 councils seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Planned Sales
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next April to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead 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 cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.