Based on a new survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said 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 temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
