According to a recent study of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing major urban areas in the UK stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will need to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “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 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
