Based on a recent study of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have previously come under fire for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of councils seeking to generate funds from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Examples of Planned Sales
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 generate rent for Medway council, will additionally be disposed of under the plan.
Council Tax Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to raise local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these take time to achieve both better provisions and cost efficiency,” stated a council leader.
He continued: “There are demographic pressures which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
A survey of county councils this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most deprived in the country.
- “Member cities like several major towns rank in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the scale of difficulties facing local leaders across major urban centers in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have cut or compromised social care provision in the past 12 months, the study found.
