Based on a recent 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 Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are intending to dispose of properties to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals 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 some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities recently also found local finances being stretched by the increasing figures of young people and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, several participating urban areas were included in 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,” said the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures highlights the extent of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” stated a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the survey found.
