Based on a latest study of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that six out of ten of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and land to support their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase local levies 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 proceed with property disposals after steep rises 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 take time to deliver both improved services and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils this week further found local finances being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is among the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures underscores the scale of difficulties facing local leaders 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 reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions 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.
