According to a recent study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds 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 also be sold under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently also found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data highlights 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 real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
