According to a new study of local authorities, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to increase local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales 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 adopting creative strategies but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face population challenges which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently further found local finances being stretched by the growing number of young people and adults requiring Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
