According to a recent study of local authorities, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
The group noted that a high proportion of authorities seeking to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Council Tax Rises and Broader Fiscal Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will need to raise local levies next April to address the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures 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.”
Countrywide Trends and Forecasts
Research of county councils recently also found council budgets being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network projected that local shortfalls 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 planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The figures highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the survey found.
