Based on a recent survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to raise local levies next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to add to 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.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns 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 ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey found.
