According to a new poll of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its property management strategy included the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- 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.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
