According to a new study of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
