According to a latest poll of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Strains
The survey of councils in the coalition, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next spring to address the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with asset sales 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 creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He added: “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 central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently also found local finances being stretched by the increasing figures of children and older individuals needing 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 increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey revealed.
