According to a new poll of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next spring to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said 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 short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
