According to a latest survey of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
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 another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Council Tax Rises and Broader Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase council taxes next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained 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 temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the strains 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.”
National Patterns and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children 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 cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
