Based on a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using savings to weather growing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent said its property management strategy included the disposal of a shopping centre in a local town and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
