Based on a latest poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its property management strategy featured the sale of a retail complex 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 held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for 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 top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of challenges facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
