According to a new poll of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
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 £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis 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.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.
