According to a new poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England 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.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities this week further found council budgets being strained by the increasing figures of children and adults 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 manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear 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.
“Lacking 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 residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
