According to a new poll of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing major urban areas in the UK reported that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will have to increase local levies next April to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said 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 temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures 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 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
Research of county councils this week also found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
