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 balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the sale of a retail complex in Rainham and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will have to raise council taxes next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils recently also found council budgets being stretched by the growing number of children and adults needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
