According to a recent poll of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in Rochester 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 the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils this week also found local finances being strained by the growing number of children and adults requiring Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting local leaders across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
