According to a latest study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land 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 significant number of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will need to increase local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals 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 taking creative strategies but some of these require time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils recently also found council budgets being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study revealed.
