According to a new poll of municipal councils, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise council taxes next spring to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains 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 county councils recently also found council budgets being stretched by the growing number of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
