Based on a new study of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to raise council taxes next April to address the rising cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of challenges confronting local leaders across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
