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 rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils 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 growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan included the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
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 authorities will need to raise council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils this week further found council budgets being strained by the growing number of young people and older individuals needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
