Based on a recent poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities 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 land to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Examples of Planned Sales
One local authority in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils this week further found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering English councils, several participating urban areas were among the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the most deprived fifth of England. The figures underscores the scale of challenges confronting local leaders across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
One in five of local authorities have reduced or weakened care services in the last year, the survey revealed.
