Based on a latest poll of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten 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 come under fire for selling playing fields and land 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 significant number of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England said its property management strategy included the disposal of a retail complex in Rainham and a community venue in Rochester to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will have to increase council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently also found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the study revealed.
