According to a recent survey of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and open spaces to support their finances, but they contend they must continue to raise vital cash from asset sales or face insolvency.
The group said that a high proportion of authorities seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in a local town and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority explained it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face 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 over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being stretched by the increasing figures of children and adults needing special educational assistance.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, several participating urban areas were among the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of challenges facing municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of local authorities have reduced or weakened social care provision in the last year, the survey revealed.
