According to a new poll of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of local authorities are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise service redesigns and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent announced its property management strategy featured the disposal of a retail complex in Rainham and a social club in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the plan.
Council Tax Increases and Broader Fiscal Pressures
The survey of local authorities in the coalition, which includes several urban centers, also found that more than 70% of councils will have to raise council taxes next April to cover the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but some of these take time to achieve both better provisions and financial savings,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
Research of regional authorities recently further found council budgets being stretched by the increasing figures of young people and adults needing special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and responds to the actual extent of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
