According to a latest poll of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to cover the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of public land and open spaces to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of authorities attempting to generate funds from a quick sale of assets represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in a local town and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to raise council taxes next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to achieve both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils recently also found council budgets being strained by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
