Based on a recent poll of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising financial reserves to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the extent of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
