According to a new survey of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that 60% of local authorities are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using savings to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will have to increase council taxes next April to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face 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 over the past decade, which is very challenging.”
National Patterns and Projections
A survey of regional authorities this week further found local finances being strained by the increasing figures of young people and adults requiring Send support.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the survey found.
