Based on a new poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
Medway Council in southeast England said its property management strategy included the sale of a shopping centre in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of councils will need to raise council taxes next spring to cover the growing cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
A survey of county councils this week further found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“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 local authorities have reduced or weakened care services in the past 12 months, the survey found.
