Based on a new study of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely 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 England reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of playing fields and land to support their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Pressures
This research of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to raise local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (IMD) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
