Based on a latest poll of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and land to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for Medway council, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
