According to a recent poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to support their budgets, but they contend they must proceed to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in Rainham and a social club in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He added: “There are demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils this week also found local finances being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The data highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Lacking this, councils will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study found.
