According to a new survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will have to raise local levies next April to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the extent of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey found.
