Based on a latest study of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils 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 continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising savings to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the survey revealed.
