Based on a new study of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of authorities attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a retail complex in Rainham and a community venue in another town to raise £20m over five years.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities this week further found council budgets being strained by the growing number of children and adults requiring special educational assistance.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms has been postponed.
Deprivation and Financial Shortfalls
According to the most recent deprivation measures (IMD) for UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers 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.
“While 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 England. The figures highlights the extent of difficulties confronting local leaders across key cities in the coming year,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised care services in the last year, the survey found.
