Based on a latest poll of municipal councils, UK councils are preparing to sell social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group 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 adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Detailed Examples of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week also found local finances being strained by the growing number of children and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (IMD) for English councils, several key cities members were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing local leaders across key cities in the next twelve months,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable financial structure that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey found.
