According to a recent poll of municipal councils, UK councils are preparing to offload social clubs, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that 60% of councils are intending to sell assets to meet the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan featured the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to increase local levies next April to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities this week also found council budgets being stretched by the increasing figures of young people and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members 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 in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the survey found.
