Based on a recent survey of local authorities, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Cases of Planned Sales
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the coalition, which includes several urban centers, also found that over seven in ten 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.
Medway council said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
