According to a recent survey of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the plan.
Council Tax Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to increase local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase 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
Research of regional authorities recently further found local finances being strained by the growing number of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.
