Based on a latest study of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they rely on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that 60% of councils are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have previously faced criticism for selling playing fields and open spaces to support their budgets, but they contend they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
The group said that a significant number of councils attempting to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials stated they would focus on restructuring services and using savings to weather increasing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in Kent said its property management strategy included the disposal of a retail complex in a local town and a social club in another town to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will also be sold under the plan.
Local Levy Increases and Wider Financial Pressures
The survey of local authorities in the key cities group, which includes several urban centers, also found that over seven in ten of authorities will have to raise local levies next April to address the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are adopting creative strategies but some of these require time to deliver both better provisions and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will persist to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Trends and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of children and adults needing special educational assistance.
The County Councils Network said that council deficits will reach £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 white paper outlining those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 across the country under the latest IMD measures,” noted the study.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are far more likely to be in the worst-off 20% of the nation. The data underscores the scale of challenges facing local leaders across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that accounts for and addresses the actual extent of deprivation and demand,” said Michael Mordey.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
A fifth of councils have reduced or weakened social care provision in the last year, the study found.
