According to a new survey of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained 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 certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
