Based on a latest survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Planned 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 community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next spring to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council said it will press ahead 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 taking creative strategies but certain measures take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and older individuals needing Send support.
A network of councils said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
