According to a new study of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples 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 social club in Rochester to generate £20m over five years.
- 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.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
