Based on a recent study of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils recently also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged 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,” said the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” stated a council leader.
“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 residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
