According to a new poll of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would prioritise service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Fiscal Pressures
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) covering English councils, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
