According to a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase local levies next April to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being stretched by the growing number of young people and adults requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the study found.
