According to a new poll of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales 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 creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being stretched by the growing number of young people and adults requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for UK local authorities, several key cities members 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 deprivation indices,” noted the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the study revealed.
