Based on a recent study of local authorities, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that 60% of local authorities are planning to sell assets to meet the rising 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 argue they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for English councils, many key cities members were among 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,” said the study.
“While only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and need,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
