According to a new poll of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in southeast England said its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to increase local levies next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 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 nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the study revealed.
