According to a recent poll of municipal councils, 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.
Growing Fiscal Challenges Drive Asset Sales
A coalition of councils representing major urban areas in England reported that 60% of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
The group said that a significant number of authorities attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to weather increasing financial challenges.”
Specific Cases of Proposed Disposals
One local authority in southeast England announced its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase local levies next spring to address the growing cost of essential services, increased rates of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with asset sales after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He added: “We face population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Trends and Projections
A survey of county councils recently further found council budgets being strained by the growing number of children and adults requiring Send support.
The County Councils Network projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage increased demand.
Government officials have delayed planned reforms to the Send system until next year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Gaps
Based on the most recent deprivation measures (IMD) for UK local authorities, several key cities members were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest deprivation indices,” noted the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across key cities in the next twelve months,” the report concluded.
“Council officials have been explicit about the need for a equitable and lasting financial structure that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will continue to face difficult decisions around which vital provisions to allocate spend to, and which to reduce, to the detriment of their residents.”
One in five of local authorities have cut or compromised social care provision in the past 12 months, the study revealed.
