According to a latest study of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have in the past come under fire for selling public land and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Cases of Planned Disposals
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to increase local levies next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” said a council leader.
He added: “There are demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The figures highlights the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the survey found.
