Based on a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to raise local levies next April to address the growing cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.
