According to a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in England reported that six out of ten of local authorities are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (six in ten) of municipal officials stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
One local authority in Kent announced its property management strategy featured the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over the next half-decade.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Increases and Broader Fiscal Strains
The survey of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will have to raise local levies next April to address the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of youth support, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will persist to add to the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently also found local finances being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected 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 special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering UK local authorities, several 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 nationally under the latest deprivation indices,” said the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures underscores the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Local government leaders have been explicit about the necessity for a fair and sustainable financial structure that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“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.”
One in five of councils have reduced or weakened social care provision in the last year, the survey found.
