Based on a latest poll of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets 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 support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to raise council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently also found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
