Based on a recent study of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to raise money from a quick sale of assets 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 manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan 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 business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures 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 very challenging.”
Countrywide Patterns and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in the most deprived in England.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
