Based on a recent poll of municipal councils, UK councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, 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: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils recently further found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey revealed.
