According to a recent survey of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for second-tier cities in the UK reported that six out of ten of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to manage increasing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in Kent said its asset disposal plan featured the disposal of a retail complex in a local town and a social club in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
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 creative strategies but certain measures require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
A survey of regional authorities recently also found local finances being strained by the increasing figures of young people and adults needing Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Financial Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
