Based on a new poll of local authorities, UK councils are preparing to offload community centers, sports centres, 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 major urban areas 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.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Sales
One local authority in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise 20 million pounds over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of local authorities in the key cities group, which includes several urban centers, further found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding accommodation deficit.
Medway council said it will proceed with property disposals after sharp increases in the cost of youth support, 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 deliver both better provisions and cost efficiency,” stated a council leader.
He added: “We face demographic pressures which will persist to increase the strains we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals requiring Send support.
A network of councils projected that council deficits will reach £4.4bn a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the most recent indices of deprivation (IMD) for English councils, several key cities members were among the most disadvantaged in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the survey found.
