Based on a new survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
A coalition of councils representing second-tier cities in the UK reported that six out of ten of councils are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to support their finances, 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 attempting to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise service redesigns and using savings to weather growing financial challenges.”
Specific Examples of Proposed Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate 20 million pounds over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will also be sold under the plan.
Council Tax Rises and Wider Financial Strains
This research of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will need to increase local levies next spring to address the rising cost of essential services, increased rates of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are demographic pressures which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for English councils, many participating urban areas were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 across the country under the latest deprivation indices,” said the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the scale of difficulties facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and demand,” stated a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised care services in the past 12 months, the study found.
