According to a latest poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and adults requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (IMD) for English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
