According to a recent poll of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to weather increasing fiscal pressures.”
Specific Examples of Proposed Disposals
Medway Council in southeast England announced its asset disposal plan featured the sale of a retail complex in a local town and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the coalition, which covers several urban centers, further found that more than 70% of authorities will have to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found council budgets being strained by the increasing figures of children and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed planned reforms to the special educational needs framework until next year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened care services in the last year, the study revealed.
