According to a new poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority 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 creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to add to 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.”
Countrywide Patterns and Projections
Research of county councils this week also found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering 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 rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
