Based on a recent survey of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of public land and land to shore up their finances, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will need to increase council taxes next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that council deficits will hit £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 policy document outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
