According to a latest survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England reported that 60% of councils are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Cases of Planned Sales
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures 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
A survey of county councils this week further found council budgets being stretched by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (IMD) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties 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 addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
