According to a recent survey of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of public land and open spaces 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 significant number of authorities attempting to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Increases and Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to increase local levies next April to address the growing cost of essential services, increased rates of homelessness, 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 temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently further found council budgets being stretched by the growing number of children and adults requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
