Based on a latest survey of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Detailed Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the disposal 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 business parks owned in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of councils will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will continue to add to the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of young people and adults needing 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 struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Gaps
According to the most recent indices of deprivation (IMD) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only one key city is among the top 10 for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data highlights the extent of challenges facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the study found.