Based on a new survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England said its property management strategy 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 owned in two English counties, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
The survey of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise council taxes next April to address the rising cost of core provisions, increased rates of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils this week further found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document outlining those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
