Based on a new study of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent 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 short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
