According to a new poll of local authorities, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of local authorities are intending to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to support their budgets, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition said that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise service redesigns and using financial reserves to manage increasing financial challenges.”
Detailed Examples of Planned Sales
Medway Council in southeast England said its property management strategy featured the disposal of a shopping centre in Rainham and a social club in Rochester to raise £20m over the next half-decade.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for the authority, will also be sold under the strategy.
Council Tax Rises and Wider Fiscal Strains
The survey of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to increase local levies next spring to address the rising cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after steep rises in the cost of youth support, 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 deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
A survey of regional authorities recently further found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until the coming year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Shortfalls
According to the latest deprivation measures (IMD) covering UK local authorities, many participating urban areas were included in the most disadvantaged in England.
- “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,” noted the report.
“Although only one key city is in the ten most deprived for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The figures highlights the extent of difficulties facing local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the real levels of disadvantage and demand,” stated a council leader.
“Without this, local authorities will continue to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
