According to a recent poll of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would prioritise service redesigns and using savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of authorities will have to raise council taxes next April to address the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils this week further found council budgets being stretched by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
