Based on a recent study of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and land to support their finances, but they contend they must proceed to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using savings to manage growing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Pressures
The survey of councils in the coalition, which includes several urban centers, also found that over seven in ten of councils will have to increase local levies next spring to cover the growing cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
The authority explained it will proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities recently further found council budgets being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Council officials have been clear 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, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
