Based on a recent poll of local authorities, UK councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, further found that over seven in ten of councils will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases 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 some of these take time to achieve both improved services and cost efficiency,” said a council leader.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
National Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” said the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
