According to a latest poll of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils this week further found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for 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 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
