Based on a new survey of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and open spaces to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of county councils recently further found council budgets being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although 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 extent of challenges facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study revealed.
