Based on a new survey of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land 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 attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of regional authorities this week further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges confronting local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey revealed.
