According to a new study 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 balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising savings to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan featured the sale of a retail complex in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently also found local finances being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey found.
