According to a recent study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures 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 meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of councils in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 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 municipal officials across key cities in the coming year,” the report 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 demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
