Based on a new survey of local authorities, UK councils are preparing to offload social clubs, sports centres, and retail spaces as they rely on a fire sale of properties to balance the books.
Growing Financial Challenges Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of local authorities are intending 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 shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a high proportion of councils seeking to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Disposals
One local authority in Kent said its asset disposal plan included the disposal of a shopping centre in a local town and a community venue in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Pressures
The survey of councils 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 core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently further found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they grapple to cope with rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Disadvantage and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the worst-off 20% of England. The data highlights the scale of difficulties confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” said a council leader.
“Without this, local authorities will persist to face impossible choices around which essential services to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the study found.
