Based on a new survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
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 raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” 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 the nation. The data underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the last year, the survey found.
