Based on a latest study of local authorities, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that 60% of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to increase local levies next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities this week further found local finances being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Government officials have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges facing local leaders across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey revealed.
