Based on a recent poll of local authorities, UK councils are planning to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Financial Pressures
This research of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures 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 extremely difficult.”
National Trends and Projections
A survey of regional authorities this week also found local finances being stretched by the growing number of young people and adults requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (IMD) covering English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data highlights the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
