🔗 Share this article

Based on a latest study of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they bet on a rapid disposal of assets to balance the books.

Growing Financial Pressures Prompt Asset Sales

The Key Cities Group representing second-tier cities in England reported that 60% of councils are planning to dispose of properties to meet the escalating costs of adult and children’s social care.

Local governments have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.

This coalition said that a significant number of authorities attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would focus on restructuring services and utilising savings to manage growing fiscal pressures.”

Specific Examples of Planned Disposals

Medway Council in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a social club in Rochester to raise £20m over five years.

• Gillingham golf club and commercial properties held in two English counties, which all provide rental income for the authority, will additionally be disposed of under the strategy.

Local Levy Rises and Wider Financial Strains

This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise local levies next April to cover the growing cost of essential services, higher levels of homelessness, and a persistent housing shortage.

Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.

“We are taking creative strategies but certain measures require time to deliver both improved services and financial savings,” said Vince Maple.

He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”

Countrywide Trends and Projections

A survey of county councils this week further found council budgets being stretched by the growing number of young people and adults requiring Send support.

A network of councils said that council deficits will reach £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.

Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.

Deprivation and Funding Gaps

According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, several key cities members were among the most disadvantaged in the country.

• “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.

“While only one key city is in the ten most deprived for deprived neighbourhoods nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the extent of challenges confronting local leaders across major urban centers in the next twelve months,” the analysis concluded.

“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and demand,” said a council leader.

“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”

A fifth of councils have reduced or weakened care services in the past 12 months, the study revealed.