Based on a latest poll of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they rely on a rapid disposal of properties to balance the books.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of local authorities are intending to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for disposing of playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in Kent announced its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that more than 70% of authorities will have to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of regional authorities this week further found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey revealed.
