According to a recent survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next April to cover the rising cost of core provisions, higher levels of homelessness, 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 certain measures require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils this week also found local finances being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
