Based on a new poll of local authorities, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to shore up their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets represented “a clear change from 2024, when the majority (six in ten) of local leaders said they would focus on service redesigns and using financial reserves to weather growing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of councils will need to increase local levies next spring to cover the growing cost of essential services, higher levels 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, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils recently also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they struggle to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent deprivation measures (IMD) covering UK local authorities, several key cities members were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and responds to the actual extent of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will continue 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 care services in the past 12 months, the study revealed.
