According to a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Financial 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 escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling public land and land to support their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of councils seeking to generate funds from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and using financial reserves to manage growing financial challenges.”
Detailed Cases of Planned Sales
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 another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to increase local levies next spring to cover the growing cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will press ahead with property disposals after sharp increases 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 take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “We face demographic pressures which will continue to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Patterns and Projections
Research of regional authorities this week also found council budgets being strained by the growing number of children and older individuals needing special educational assistance.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to cope with increased demand.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most disadvantaged in England.
- “Member cities like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, cities are much more prone to be in the most deprived fifth of the nation. The data underscores the scale of difficulties confronting municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey found.
