According to a new study of local authorities, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities 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 stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
