Based on a new poll of municipal councils, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
The Key Cities Group 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 social services for vulnerable individuals.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a significant number of councils attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using savings to weather increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
The survey of councils in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to raise council taxes next spring to cover the growing cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of county councils this week also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a policy document outlining those changes has been postponed.
Deprivation and Funding Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several key cities members were included in the most deprived in the country.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest deprivation indices,” said the study.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Local government leaders have been clear about the necessity for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the study revealed.
