Based on a recent survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase council taxes next spring to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While 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 the nation. The data underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
