According to a new survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in England reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of playing fields and open spaces to support their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money 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 utilising savings to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to raise £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said Vince Maple.
He continued: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Projections
Research of regional authorities this week further found council budgets being strained by the growing number of young people and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several participating urban areas were included in the most deprived in the country.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data highlights the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face impossible choices 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 survey revealed.
