Based on a latest poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead 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 innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently also found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system 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 impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey revealed.
