Based on a latest study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils 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.
Local governments have previously faced criticism for disposing of public land and open spaces to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader 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 councils will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week also found local finances being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Gaps
According to the latest deprivation measures (IMD) for 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 rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study revealed.
