Based on a latest survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and open spaces to support their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to manage growing financial challenges.”
Specific Examples of Planned Sales
Medway Council in Kent said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require 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 local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils this week also found council budgets being strained by the growing number of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey found.
