According to a recent poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead 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 adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges 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 over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
