Based on a latest survey of municipal councils, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after sharp increases 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 some of these require time to achieve both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
