Based on a latest poll of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising financial reserves to weather growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next April to cover the rising cost of core provisions, higher levels of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being stretched by the growing number of children and older individuals requiring Send support.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
