According to a recent poll of local authorities, UK councils are planning to offload social clubs, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise 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 disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to raise council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of county councils this week further found local finances being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” noted the report.
“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 data highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
