Based on a new survey of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and utilising financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next April to cover 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 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 creative strategies but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
