According to a new survey of local authorities, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of public land and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, 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 persistent housing shortage.
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 short-term housing.
“We are taking innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils this week also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
A network of councils said that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey revealed.
