🔗 Share this article

According to a recent survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.

Increasing Fiscal Challenges Drive Asset Sales

A coalition of councils for second-tier cities in England reported that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.

Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or face insolvency.

This coalition noted that a high proportion of authorities seeking to generate funds from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and using savings to weather growing financial challenges.”

Specific Examples of Proposed Sales

One local authority in Kent said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.

Council Tax Increases and Broader Fiscal Strains

The survey of local authorities in the coalition, which includes several urban centers, further found that more than 70% of councils will need to raise local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.

The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.

“We are adopting innovative approaches but some of these require time to deliver both improved services and cost efficiency,” said Vince Maple.

He added: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Trends and Projections

Research of regional authorities this week further found council budgets being strained by the growing number of children and adults needing Send support.

The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.

Government officials have put off scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.

Disadvantage and Funding Gaps

Based on the latest indices of deprivation (IMD) covering 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 across the country under the latest IMD measures,” said the study.

“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas 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 analysis added.

“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and responds to the actual extent of deprivation and demand,” said Michael Mordey.

“Without this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”

One in five of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.