According to a new poll of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of assets to balance the books.
Increasing Financial Pressures Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for disposing of public land and land to shore up their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a high proportion of councils attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its property management strategy featured the disposal of a retail complex in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for Medway council, will also be sold under the strategy.
Local Levy Increases and Broader Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to raise local levies next April to cover the rising cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to achieve both improved services and financial savings,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Projections
Research of county councils recently also found local finances being stretched by the growing number of children and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those changes has been postponed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (IMD) for English councils, several key cities members were among the most deprived 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 deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened social care provision in the last year, the study found.
