According to a new survey of local authorities, UK councils are planning to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK reported that six out of ten of local authorities are planning to dispose of properties to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and land to support their budgets, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise service redesigns and using savings to manage increasing financial challenges.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the disposal of a shopping centre in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- A local golf course and commercial properties owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Strains
The survey of councils in the coalition, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
The authority explained it will proceed with property disposals after steep rises in the cost of youth support, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of county councils this week further found local finances being stretched by the growing number of children and adults requiring Send support.
A network of councils said that council deficits will hit 4.4 billion pounds a year by the end of the decade, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for UK local authorities, several 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 IMD measures,” said the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, cities are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing municipal officials across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and demand,” said a council leader.
“Lacking this, local authorities will continue to face impossible choices around which essential services to fund, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened care services in the past 12 months, the survey found.
