According to a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated 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 in the past come under fire for disposing of playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Cases of Proposed Sales
One local authority in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both better provisions and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Trends and Forecasts
A survey of regional authorities recently further found council budgets being stretched by the growing number of young people and adults 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 setting out those reforms was recently delayed.
Deprivation and Financial Gaps
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened social care provision in the past 12 months, the study found.
