Based on a latest study of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said 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 temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
