According to a new survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a rapid disposal of assets to stabilize finances.
Increasing Financial Pressures Prompt Asset Sales
The Key Cities Group representing major urban areas in England stated that six out of ten of local authorities are intending to sell assets to meet the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling public land and land to shore up their finances, but they argue they must proceed to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities attempting 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 prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Specific Cases of Proposed Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in a local town 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 additionally be sold under the plan.
Local Levy Increases and Broader Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will have to increase local levies next April to address the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to increase the strains we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found local finances being strained by the increasing figures of children and adults needing Send support.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they grapple to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a policy document outlining those changes was recently delayed.
Deprivation and Financial Shortfalls
According to the latest indices of deprivation (IMD) covering English councils, many participating urban areas were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 nationally under the latest IMD measures,” noted the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The figures highlights the scale of difficulties confronting local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been explicit about the need for a fair and sustainable financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of local authorities have reduced or weakened care services in the last year, the study revealed.
