Based on a new study of local authorities, UK councils are preparing to sell community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling public land and land to support their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of authorities attempting to raise money from a quick sale of assets represented “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on restructuring services and utilising savings to weather growing financial challenges.”
Detailed Cases of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a social club in Rochester to generate £20m over the next half-decade.
- Gillingham golf club and commercial properties held in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase local levies next spring to cover the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but certain measures take time to deliver both improved services and cost efficiency,” said a council leader.
He added: “There are population challenges which will persist to add to the strains we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of regional authorities recently further found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by 2029, as they struggle to cope with increased demand.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the latest indices of deprivation (IMD) covering UK local authorities, many key cities members were among the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of difficulties facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that reflects and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, 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 revealed.
