Based on a latest poll of municipal councils, 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 Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to sell assets to cover the escalating costs of social services for vulnerable individuals.
Local governments have previously faced criticism for selling playing fields and land to support their budgets, but they contend they must continue to raise vital cash from property disposals or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of assets marked “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using savings to weather increasing financial challenges.”
Specific Examples of Proposed Sales
One local authority in southeast England said its property management strategy included the sale of a retail complex in a local town and a social club in another town to raise £20m over the next half-decade.
- Gillingham golf club and business parks owned in Worcestershire and Suffolk, which all provide rental income for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Pressures
This research of local authorities in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of councils will have to raise council taxes next spring to address the growing cost of essential services, higher levels of homelessness, and a longstanding housing shortage.
Medway council said it will proceed with asset sales after steep rises in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated 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 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
Countrywide Patterns and Forecasts
Research of county councils recently also found local finances being stretched by the increasing figures of young people and older individuals needing 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 struggle to manage rising needs.
Government officials have delayed scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent deprivation measures (the Index of Multiple Deprivation) covering English councils, many participating urban areas were among the most deprived in England.
- “Participating urban centers like several major towns rank in the top 30 across the country under the latest deprivation indices,” said the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the most deprived fifth of England. The data underscores the extent of difficulties confronting local leaders across major urban centers in the coming year,” the analysis concluded.
“Local government leaders have been clear about the necessity for a equitable and lasting funding system that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their residents.”
One in five of councils have cut or compromised social care provision in the last year, the survey found.
