Based on a recent survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a quick 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 savings to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
Medway Council in southeast England said its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of county councils recently further found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study found.
