Based on a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to shore up their finances, but they argue they must continue to raise vital cash 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 (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in Kent said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Fiscal 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 need to increase council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the survey found.
