According to a latest study of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next April to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue 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 very challenging.”
National Trends and Projections
A survey of county councils this week further found local finances being stretched by the growing number of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the study found.
