According to a new study of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that more than 70% of authorities will need to increase local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities this week further found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study found.
