Based on a new poll of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of councils are planning to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and open spaces to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being stretched by the growing number of young people and adults needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the latest deprivation measures (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 top 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis 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 deprivation and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have cut or compromised care services in the past 12 months, the study revealed.
