According to a new study of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Detailed Cases of Planned Sales
Medway Council in Kent announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to increase local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being strained by the increasing figures of children and adults needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Member cities 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 one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the study found.
