According to a new study of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover the escalating 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 finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets marked “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would prioritise service redesigns and utilising financial reserves to weather growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to raise local levies next spring to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” said a council leader.
He added: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
A survey of county councils this week also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “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.
“While only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised care services in the past 12 months, the study revealed.
