Based on a latest study of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils attempting to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of county councils recently further found local finances being stretched by the growing number of young people and older individuals needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
