Based on a latest survey of local authorities, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and open spaces to shore up their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders said they would focus on restructuring services and utilising savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in Kent announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Council Tax Increases and Wider Financial Strains
This research of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will have to increase local levies next spring to cover the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face population challenges which will continue 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 very challenging.”
Countrywide Patterns and Forecasts
Research of regional authorities this week also found council budgets being strained by the growing number of children and adults needing Send support.
A network of councils said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, many key cities members were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the necessity for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
