Based on a latest survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” stated a council leader.
He added: “There are demographic pressures 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 over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
