🔗 Share this article

Based on a recent study of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a fire sale of assets to balance the books.

Increasing Fiscal Pressures Prompt Asset Sales

A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.

Councils have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.

The group noted that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising savings to weather growing fiscal pressures.”

Detailed Examples of Proposed Disposals

Medway Council in southeast England said its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to raise £20m over five years.

• A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.

Local Levy Increases and Wider Fiscal Strains

The survey of councils in the coalition, which includes several urban centers, further found that over seven in ten of authorities will need to increase local levies next spring to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.

Medway council said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.

“We are adopting innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.

He added: “There are demographic pressures 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 Trends and Forecasts

Research of county councils recently also found local finances being stretched by the growing number of young people and adults requiring Send support.

The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.

Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms has been postponed.

Disadvantage and Funding Shortfalls

Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.

• “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.

“Although only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.

“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.

“Lacking this, councils will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”

One in five of councils have reduced or weakened care services in the last year, the survey revealed.