According to a recent study of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils recently also found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Gaps
Based on the most recent deprivation measures (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the survey revealed.
