Based on a latest study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found local finances being strained by the increasing figures of young people and adults 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 manage rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
