According to a new poll of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England stated that 60% of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.