According to a recent poll of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with property disposals 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 taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
