Based on a new poll of municipal councils, UK councils are preparing to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have in the past come under fire for selling playing fields and land to shore up their budgets, but they contend they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to generate funds from a quick sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders stated they would prioritise restructuring services and using financial reserves to weather growing fiscal pressures.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the plan.
Local Levy Rises and Wider Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities will have to raise local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to achieve both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Trends and Projections
Research of county councils this week further found local finances being strained by the increasing figures of children and adults requiring special educational assistance.
A network of councils said that council deficits will reach 4.4 billion pounds a year by 2029, as they struggle to cope with rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
Based on the most recent indices of deprivation (IMD) covering English councils, many key cities members were among the most deprived in England.
- “Member cities 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 in the top 10 for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting municipal officials across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and demand,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the detriment of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the study found.
