According to a recent poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent announced its asset disposal plan featured the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to increase council taxes next April to cover the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) for English councils, several key cities members were among 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 deprivation indices,” said the report.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the report added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the last year, the survey revealed.
