Based on a latest survey of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to generate £20m over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals 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 taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils recently further found local finances being strained by the growing number of young people and older individuals needing special educational assistance.
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 cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 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 confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have cut or compromised social care provision in the past 12 months, the survey found.
