Based on a latest study of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and land to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would prioritise service redesigns and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Sales
One local authority in Kent said its property management strategy featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to raise council taxes next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face population challenges which will continue 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 extremely difficult.”
National Trends and Forecasts
Research of county councils recently further found council budgets being stretched by the increasing figures of children and adults needing Send support.
The County Councils Network projected 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 policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study found.
