Based on a new study of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the rising 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 shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money 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 financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase local levies next spring to address the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.