According to a recent survey of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Growing Financial Pressures Drive 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 escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils seeking to generate funds from a quick sale of assets represented “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.”
Detailed Cases of Planned Disposals
One local authority in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will additionally be sold under the plan.
Council Tax Increases and Broader Financial Pressures
This research of councils in the key cities group, which includes several urban centers, further found that more than 70% of councils will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have put off planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and demand,” stated a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
