According to a latest survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its property management strategy included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing municipal officials 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 accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
