Based on a recent study of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, 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 key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist 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 reduced or weakened social care provision in the past 12 months, the study revealed.
