🔗 Share this article

Based on a latest survey of local authorities, UK councils are planning to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.

Growing Financial Pressures Drive Asset Sales

A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.

Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.

The group said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to weather increasing financial challenges.”

Detailed Cases of Proposed Sales

One local authority in Kent said its property management strategy featured 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 owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be sold under the strategy.

Local Levy Rises and Wider Fiscal Strains

This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.

Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.

“We are taking innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated a council leader.

He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”

Countrywide Patterns and Projections

Research of regional authorities this week also found local finances being strained by the growing number of children and older individuals requiring Send support.

A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.

Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document outlining those changes has been postponed.

Disadvantage and Funding Gaps

According to the latest deprivation measures (IMD) covering English councils, several participating urban areas were among the most disadvantaged in England.

• “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.

“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The figures highlights the extent of challenges facing municipal officials across major urban centers in the next twelve months,” the report concluded.

“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.

“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”

A fifth of councils have reduced or weakened social care provision in the past 12 months, the study found.