According to a latest survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their finances, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and utilising savings to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also 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 Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently further found council budgets being stretched by the increasing figures of children and adults 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 cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (IMD) for English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and demand,” said a council leader.
“Lacking this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
