According to a new poll of municipal councils, UK councils are preparing to sell social clubs, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next spring to address the growing cost of core provisions, increased rates of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is in 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 confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and need,” 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 detriment of their residents.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
