According to a recent survey of municipal councils, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to support 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 authorities seeking to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
The survey of councils in the coalition, which covers 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, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals needing 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 grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
