According to a latest study of local authorities, UK councils are planning to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and open spaces to support their budgets, but they argue they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a high proportion of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and using financial reserves to weather growing financial challenges.”
Specific Cases of Planned Sales
Medway Council in southeast England said its property management strategy featured the sale of a shopping centre in a local town and a social club in another town to raise 20 million pounds over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Wider Financial Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will have to increase local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
The authority said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking innovative approaches but some of these take time to achieve both improved services and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to 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 county councils this week also found local finances being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by the end of the decade, as they grapple to cope with increased demand.
Ministers have put off planned reforms to the special educational needs framework until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most deprived in England.
- “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,” noted the report.
“While only a single urban area is in the top 10 for disadvantaged communities countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The figures highlights the extent of difficulties confronting municipal officials across major urban centers in the coming year,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, 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 study revealed.
