🔗 Share this article

According to a recent survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.

Increasing Fiscal Challenges Drive Asset Sales

The Key Cities Group representing second-tier cities in England reported that 60% of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.

Councils have in the past come under fire for selling public land and land to shore up their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.

This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of assets represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”

Detailed Examples of Proposed Sales

One local authority in southeast England announced its asset disposal plan featured the disposal of a retail complex in Rainham and a community venue in Rochester to raise 20 million pounds over the next half-decade.

• Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.

Local Levy Rises and Wider Financial Strains

The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.

Medway council said it will proceed with asset sales after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.

“We are adopting innovative approaches but some of these require time to achieve both better provisions and cost efficiency,” stated Vince Maple.

He added: “We face population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”

National Trends and Forecasts

A survey of regional authorities recently also found local finances being strained by the growing number of children and older individuals needing special educational assistance.

A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to cope with increased demand.

Ministers have put off planned reforms to the special educational needs framework until the coming year after a white paper setting out those reforms has been postponed.

Disadvantage and Financial Gaps

According to the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most disadvantaged in England.

• “Member cities like several major towns rank in the most deprived 30 across the country under the latest IMD measures,” noted the report.

“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of England. The data highlights the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the analysis added.

“Local government leaders have been clear about the need for a equitable and lasting funding system that accounts for and addresses the actual extent of disadvantage and demand,” stated Michael Mordey.

“Without this, local authorities will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their residents.”

A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.