According to a latest study of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Broader Financial Pressures
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of councils will have to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the study found.
