According to a new study of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal 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 cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan 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.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities recently also found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties facing local leaders across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and addresses the actual extent of disadvantage and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
