According to a recent survey of local authorities, UK councils are planning to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would prioritise service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next April to address the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures 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 very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities this week further found council budgets being strained by the growing number of children and adults requiring Send support.
A network of councils projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
