According to a recent survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Specific Examples of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Projections
Research of county councils recently also found council budgets being stretched by the growing number of young people and older individuals needing special educational assistance.
A network of councils projected that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis concluded.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
