According to a new poll of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be sold under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will need to raise local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will continue to increase the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Forecasts
Research of county councils recently further found local finances being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have put off planned reforms to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (the Index of Multiple Deprivation) covering English councils, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of England. The figures highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, councils will persist to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
