According to a latest survey of municipal councils, UK councils are preparing to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in the UK 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 come under fire for disposing of playing fields and open spaces to support their finances, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to raise local levies next April to address the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (IMD) for English councils, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing local leaders across key cities in the coming year,” the report added.
“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 deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
