Based on a latest poll of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” 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.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
