Based on a latest poll of local authorities, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to support their budgets, 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 authorities attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in Kent said its asset disposal plan featured 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 commercial properties owned in two English counties, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Broader Financial Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to increase council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
Research of county councils this week further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of the nation. The data underscores the extent of difficulties confronting 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 accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
