According to a recent study of local authorities, UK councils are planning to sell social clubs, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next April to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both better provisions and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
