Based on a latest poll of municipal councils, UK councils are preparing to offload community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a social club in another town to generate £20m over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next spring to address the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority said 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 innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will continue to increase the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Trends and Forecasts
Research of county councils recently also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have put off planned reforms to the special educational needs framework until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and addresses the real levels of disadvantage and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face difficult decisions around which essential services to fund, and which to reduce, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
