According to a new study of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to weather increasing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase council taxes next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently also found local finances being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
