According to a recent survey of municipal councils, English councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to raise local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority 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 require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “There are demographic pressures 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 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week further found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas 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 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the scale 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 financial structure that accounts for and responds to the real levels of deprivation and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
