According to a new survey of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will press ahead with property disposals 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 achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found local finances being strained by the increasing figures of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
