According to a new poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the largest share (60%) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He continued: “There are population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network said that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey found.
