According to a new survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils for major urban areas in England stated that 60% of councils are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in southeast England announced its property management strategy featured the disposal of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase council taxes next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) for UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking 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.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study found.
