Based on a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in England reported that 60% of local authorities 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 land to shore up their finances, but they contend they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition said that a high proportion of councils attempting to generate funds from a quick sale of holdings represented “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and using savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over five years.
- A local golf course and commercial properties held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
The survey of councils in the coalition, which covers several urban centers, also found that over seven in ten of authorities will need to raise local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a persistent housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being stretched by the increasing figures of children and adults needing Send support.
A network of councils said that local shortfalls will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Government officials have put off planned reforms to the Send system until next year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) for 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 place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the extent of challenges facing local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of councils have reduced or weakened social care provision in the last year, the study revealed.
