Based on a recent study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials said they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“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 demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
