According to a latest survey of municipal councils, UK councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that 60% of local authorities are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields 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 said that a significant number of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (six in ten) of municipal officials said they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan included 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.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be sold under the plan.
Local Levy Rises and Wider Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that more than 70% of authorities will have to increase local levies next April to cover the growing cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “There are demographic pressures which will continue 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.”
Countrywide Trends and Projections
Research of county councils recently further found council budgets being strained by the growing number of children and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (IMD) for English councils, many key cities members were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest IMD measures,” noted the report.
“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 worst-off 20% of the nation. The data highlights the extent of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and addresses the actual extent of disadvantage and need,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
