Based on a new study of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “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 Projections
Research of county councils recently also found local finances being stretched by the growing number of young people and older individuals needing Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
