Based on a recent study of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Challenges Drive Asset Sales
The Key Cities Group for second-tier cities in England reported that 60% of councils are planning to dispose of properties to cover the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition said that a significant number of councils seeking to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a community venue in another town to generate £20m over five years.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Rises and Broader Financial Pressures
This research of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will have to increase local levies next spring to address the rising cost of core provisions, higher levels of homelessness, and a longstanding accommodation deficit.
Medway council explained it will press ahead with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face 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 2010-24, which is extremely difficult.”
National Patterns and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of young people and adults needing special educational assistance.
The County Councils Network said 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 policy document outlining those changes was recently delayed.
Disadvantage and Financial Shortfalls
According to the latest indices of deprivation (IMD) for UK local authorities, many participating urban areas were included in the most disadvantaged 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 among the ten most deprived for disadvantaged communities nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of challenges confronting municipal officials across key cities in the coming year,” the analysis added.
“Local government leaders have been explicit about the need for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said a council leader.
“Without this, local authorities will continue 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 local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
