According to a new survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent said its property management strategy included the sale of a shopping centre in a local town and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Broader Financial Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will press ahead 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 taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the increasing figures of children and adults needing special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the coming year,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
