Based on a latest study of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
Medway Council in Kent said its property management strategy featured the sale of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey found.
