Based on a recent survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to manage growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to increase local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
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 adopting creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face population challenges which will persist to add to 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.”
Countrywide Patterns and Projections
Research of county councils recently further found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
