Based on a recent survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and open spaces to shore up their budgets, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Cases of Proposed Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Rises and Wider Financial Strains
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase council taxes next April to cover the growing cost of essential services, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting creative strategies but certain measures require time to deliver both improved services and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils recently further found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, many participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
