Based on a new survey of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that 60% of local authorities are planning to sell assets to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past come under fire for selling public land and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers several urban centers, also found that more than 70% of councils will have to increase council taxes next April to address the rising cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of young people and adults needing special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have put off planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) for English councils, 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,” said the report.
“While only one key city 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 highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
