According to a latest survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK reported that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Planned Disposals
One local authority in Kent announced its property management strategy included the sale of a retail complex in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the plan.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise council taxes next spring to cover the rising cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both better provisions and financial savings,” said a council leader.
He added: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently further found local finances being strained by the growing number of children and older individuals needing Send support.
The County Councils Network said that local shortfalls will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the Send system until the coming year after a white paper outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering 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 rank in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of challenges confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting funding system that reflects and addresses the real levels of disadvantage and need,” said Michael Mordey.
“Without this, councils will continue to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study revealed.
