According to a recent poll of local authorities, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Financial Strains
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will need to increase council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority said it will proceed 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 taking innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils this week further found council budgets being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those changes has been postponed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were among the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study found.
