According to a latest study of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Specific Examples of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
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 innovative approaches but certain measures require time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue 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 Patterns and Forecasts
A survey of county councils this week also found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (IMD) covering UK local authorities, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data highlights the extent of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
