According to a latest study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition 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 majority (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to raise council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need 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 impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
