Based on a recent study of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said 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 creative strategies but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found council budgets being stretched by the increasing figures of children and adults needing Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
