Based on a latest poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Detailed Cases of Proposed Sales
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils recently further found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue 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 care services in the past 12 months, the survey revealed.
