According to a new study of municipal councils, UK councils are planning to sell community centers, sports centres, and retail spaces as they bet on a rapid disposal of properties to balance the books.
Increasing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for disposing of public land and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of councils seeking to raise money from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan included the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Financial Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” stated a council leader.
He continued: “We face population challenges which will persist to add to the strains we have. As a local government body, we had a drastic reduction in our central funding from over the past decade, which is very challenging.”
National Trends and Forecasts
Research of regional authorities recently also found council budgets being stretched by the growing number of children and adults requiring Send support.
The County Councils Network said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Financial Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several participating urban areas were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of challenges confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Without this, local authorities will continue to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
