According to a new 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 stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils 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.
This coalition noted that a high proportion of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to manage increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will persist to increase 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 regional authorities this week further found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected 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 scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis 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 need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
