Based on a new survey of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England stated that six out of ten of local authorities are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of councils seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to manage increasing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in Kent said its property management strategy featured the disposal of a retail complex in a local town and a social club in another town to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the plan.
Local Levy Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes several urban centers, further found that more than 70% of authorities will have to increase council taxes next April to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being stretched by the growing number of children and adults needing Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many 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 across the country under the latest IMD measures,” said the report.
“While only a single urban area is among the top 10 for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
