According to a recent poll of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to stabilize finances.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group said that a significant number of authorities seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using savings to weather increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next spring to cover the rising cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both improved services and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
