According to a new poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they rely on a rapid disposal of properties to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are planning to sell assets to cover the escalating costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan included the disposal of a shopping centre in Rainham 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 Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next April to cover the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to increase the strains 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.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Financial Shortfalls
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the study found.
