According to a latest poll of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a rapid disposal of properties to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of playing fields and land to support their budgets, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and using financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
Medway Council in Kent announced its property management strategy featured the sale of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be disposed of under the strategy.
Council Tax Increases and Wider Fiscal Strains
This research of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next spring to address the growing cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
The authority said it will proceed with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to deliver both improved services and financial savings,” said a council leader.
He added: “There are population challenges which will continue to increase the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities recently also found local finances being stretched by the increasing figures of young people and older individuals needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have delayed scheduled changes to the special educational needs framework until next year after a white paper outlining those changes was recently delayed.
Deprivation and Financial Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of challenges confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that accounts for and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the study revealed.
