According to a latest survey of municipal councils, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to support their finances, but they argue they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and using savings to manage increasing financial challenges.”
Specific Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a social club in another town to generate £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Wider Financial Pressures
This research of councils in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to raise local levies next spring to cover the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting creative strategies but certain measures take time to achieve both better provisions and cost efficiency,” stated Vince Maple.
He added: “We face demographic pressures which will persist to increase the pressures we have. As a local government body, we had a 91% cut in our central funding from over the past decade, which is extremely difficult.”
National Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the growing number of young people and older individuals needing Send support.
A network of councils projected that local shortfalls will reach 4.4 billion pounds a year by 2029, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” said the report.
“Although only one key city 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 difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting financial structure that accounts for and addresses the actual extent of deprivation and need,” said a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have reduced or weakened care services in the last year, the study revealed.
