Based on a new survey of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to shore up their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group noted that a significant number of councils seeking 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 service redesigns and using savings to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
The authority explained 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 temporary accommodation.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
Research of regional authorities 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 projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged 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 IMD measures,” said the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised social care provision in the last year, the study revealed.
