Based on a new survey of local authorities, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent said its property management strategy featured the disposal of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase local levies next April to address the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will proceed 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 adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to 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.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found local finances being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the study revealed.
