Based on a recent study of local authorities, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have 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 asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of children and adults requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
