According to a new study of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “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 weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
