According to a recent poll of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of councils are intending to dispose of properties to meet 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 argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be disposed of under the plan.
Council Tax Rises and Wider Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to raise local levies next spring to address the growing cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“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 demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week also found local finances being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the most deprived fifth of England. The figures underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the last year, the survey found.
