🔗 Share this article

According to a new survey of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.

Increasing Financial Challenges Drive Asset Sales

The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.

Councils have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.

This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using savings to weather growing fiscal pressures.”

Specific Examples of Proposed Disposals

One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.

• A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.

Council Tax Increases and Broader Financial Strains

The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.

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 temporary accommodation.

“We are taking innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.

He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”

Countrywide Trends and Forecasts

A survey of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.

The County Councils Network said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with rising needs.

Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.

Deprivation and Funding Gaps

Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were among the most deprived in the country.

• “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the report.

“While only one key city is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of challenges facing municipal officials across key cities in the next twelve months,” the report added.

“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated a council leader.

“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”

One in five of councils have cut or compromised social care provision in the past 12 months, the survey revealed.