Based on a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and utilising savings to manage increasing financial challenges.”
Detailed Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently further found local finances being stretched by the growing number of children and adults requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study revealed.
