According to a new poll of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to increase council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and financial savings,” said Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils recently also found local finances being strained by the growing number of children and adults needing special educational assistance.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study found.
