According to a new poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils for second-tier cities in England stated that six out of ten of local authorities 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 selling public land and land to shore up their budgets, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition noted that a high proportion of authorities attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its asset disposal plan included the disposal of a retail complex in a local town and a social club in Rochester to generate 20 million pounds over five years.
- A local golf course and business parks held in two English counties, which all generate rent for Medway council, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of councils will need to increase local levies next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities this week further found council budgets being stretched by the increasing figures of children and adults needing special educational assistance.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by 2029, as they grapple to cope with rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper setting out those reforms was recently delayed.
Deprivation and Financial Shortfalls
Based on the most recent indices of deprivation (IMD) for UK local authorities, several participating urban areas were included in the most deprived in England.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the scale of difficulties facing municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and addresses the real levels of disadvantage and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have cut or compromised care services in the last year, the survey found.
