Based on a latest poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
