According to a new study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support 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 councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next April to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils recently further found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. 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 need for a fair and sustainable financial structure that accounts for and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the survey found.
