Based on a latest poll of local authorities, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to support their finances, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils seeking to raise money from a quick sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a retail complex in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will need to increase council taxes next spring to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities this week further found local finances being strained by the increasing figures of young people and adults requiring Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the most recent deprivation measures (IMD) covering English councils, several key cities members were among the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey revealed.
