Based on a latest survey of local authorities, UK councils are preparing to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling public land and open spaces to support their finances, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number of councils attempting to raise money from a quick sale of assets marked “a clear change from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and utilising savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Sales
Medway Council in Kent said its property management strategy featured the sale of a shopping centre in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Financial Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently also found council budgets being stretched by the growing number of young people and adults needing Send support.
A network of councils projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they struggle to cope with rising needs.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the most recent indices of deprivation (IMD) covering English councils, many key cities members were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the report.
“While only one key city is in the top 10 for disadvantaged communities nationally, cities are much more prone to be in the worst-off 20% of the nation. The data underscores the scale of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the study revealed.
