Based on a latest poll of municipal councils, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent said its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the last year, the survey found.
