According to a new poll of local authorities, 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 Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and land to support their budgets, but they contend they must continue to raise vital cash 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 assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
