According to a new survey of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to 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 this week further 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 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, 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.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of challenges facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
