According to a recent study of municipal councils, UK councils are preparing to offload social clubs, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils 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 declare themselves bankrupt.
The group said that a significant number of councils attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in southeast England said its property management strategy featured the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities recently also found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“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 scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey found.
