According to a new study of municipal councils, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number 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 local leaders stated they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase local levies next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although 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 worst-off 20% of the nation. The figures underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the study found.
