According to a recent poll of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in the UK stated that 60% of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to shore up their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a high proportion of councils seeking to raise money from a quick 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 fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and business parks held in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed 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 adopting creative strategies but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of county councils this week also found local finances being stretched by the growing number of children and older individuals needing Send support.
A network of councils projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have delayed planned reforms to the special educational needs framework until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several participating urban areas were included in the most deprived in the country.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data highlights the extent of challenges facing local leaders across major urban centers in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study found.
