Based on a new study of local authorities, UK councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have in the past faced criticism for disposing of public land and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Specific Cases of Proposed Sales
Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to increase council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority 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 some of these require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils recently further found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils projected that council deficits 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 Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the last year, the study revealed.
