Based on a recent survey of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of properties to balance the books.
Growing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in England stated that six out of ten of councils are intending to dispose of properties to meet the rising costs of adult and children’s social care.
Local governments have previously come under fire for disposing of public land and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (six in ten) of municipal officials said they would focus on service redesigns and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Disposals
One local authority in southeast England announced its asset disposal plan featured the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for Medway council, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise council taxes next spring to cover the growing cost of core provisions, higher levels of housing insecurity, and a persistent accommodation deficit.
Medway council said it will press ahead 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 adopting creative strategies but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is very challenging.”
National Patterns and Forecasts
Research of county councils recently further found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until next year after a white paper outlining those changes was recently delayed.
Deprivation and Funding Gaps
According to the most recent deprivation measures (IMD) for English councils, many participating urban areas were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said 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 highlights the scale of difficulties facing local leaders across major urban centers in the next twelve months,” the analysis added.
“Council officials have been clear about the need for a equitable and lasting funding system that reflects and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
