Based on a recent study of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
