Based on a latest poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England 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.
Local governments have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently further found local finances being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“While only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
