According to a new survey of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise restructuring services and using savings to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils this week further found local finances being stretched by the increasing figures of young people 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.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
