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 assets to balance the books.
Increasing Fiscal Challenges Drive Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their finances, but they contend they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its property management strategy included the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Strains
This research of councils in the coalition, which covers several urban centers, further found that more than 70% of councils will have to raise council taxes next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently further found council budgets being strained by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“While only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.
“Lacking this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the survey found.
