Based on a new study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Cases of Planned Sales
Medway Council in Kent announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next spring to cover 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 sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the pressures 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 Trends and Projections
Research of county councils recently also found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey revealed.
