According to a new poll of local authorities, UK councils are planning to sell social clubs, athletic facilities, and retail spaces as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that six out of ten 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 faced criticism for disposing of public land and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of councils will have to raise council taxes next April to address the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils recently also found local finances being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.