Based on a new poll of municipal councils, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that 60% of councils are intending to sell assets to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of municipal officials stated they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Strains
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will need to raise local levies next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent accommodation deficit.
Medway council explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures require time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and adults requiring special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the survey revealed.
