According to a new study of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to meet the escalating costs of adult and children’s social care.
Local governments have previously faced criticism for disposing of public land and open spaces to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
This coalition said that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of local leaders stated they would focus on service redesigns and utilising savings to weather growing financial challenges.”
Specific Cases of Planned Sales
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and commercial properties held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Broader Financial Pressures
The survey of local authorities in the coalition, which covers several urban centers, further found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of essential services, increased rates of homelessness, and a longstanding housing shortage.
Medway council explained it will proceed with asset sales after steep rises 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 take time to deliver both improved services and cost efficiency,” stated a council leader.
He added: “We face population challenges which will persist to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of county councils recently further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they grapple to cope with increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document setting out those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) covering English councils, several key cities members were included in the most deprived in the country.
- “Member cities like several major towns place in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Council officials have been explicit about the need for a equitable and lasting financial structure that reflects and responds to the real levels of deprivation and need,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the detriment of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey revealed.
