Based on a new poll of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and open spaces to support their finances, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Sales
Medway Council in Kent said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of councils in the key cities group, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next April to cover the rising cost of essential services, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting creative strategies but some of these take time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of regional authorities this week further found council budgets being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, many key cities members were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” said the study.
“While only one key city is among the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties facing municipal officials across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of disadvantage and need,” said a council leader.
“Lacking this, local authorities will continue 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 councils have reduced or weakened care services in the past 12 months, the survey revealed.
