According to a new survey of municipal councils, UK councils are planning to offload social clubs, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group noted that a significant number of authorities seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would prioritise restructuring services and utilising savings to manage growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes several urban centers, further found that over seven in ten of councils will need to raise council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils this week further found local finances being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
