Based on a recent poll of municipal councils, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and utilising savings to manage increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal 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 two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week also found local finances being stretched by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) for English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
