According to a new survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Detailed Examples of Proposed Sales
One local authority in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a social club in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Rises and Wider Financial Pressures
The survey of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next spring to address the growing cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week further found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils said that council deficits 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 Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived 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 deprivation indices,” noted the study.
“While only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data highlights the extent of challenges confronting local leaders across key cities in the coming year,” the report concluded.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised social care provision in the last year, the study revealed.
