According to a new study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields 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.
The group said that a high proportion of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in Kent announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week further found council budgets being stretched by the increasing figures of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
