According to a new poll of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Financial Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“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 the nation. The figures highlights the extent of challenges facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
