According to a latest study of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre 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 owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase council taxes next spring to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices 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 social care provision in the past 12 months, the survey found.
