Based on a recent poll of municipal councils, UK councils are preparing to sell community centers, sports centres, and retail spaces as they rely on a fire sale of assets to stabilize finances.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for major urban areas in the UK stated that six out of ten of councils are planning to dispose of properties to meet the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group said that a high proportion of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would focus on service redesigns and using financial reserves to weather increasing financial challenges.”
Specific Examples of Planned Disposals
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in another town 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.
Local Levy Increases and Wider Financial Pressures
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will have to raise council taxes next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council said it will press ahead with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to deliver both improved services and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Patterns and Projections
A survey of county councils recently also found local finances being stretched by the growing number of young people and adults requiring special educational assistance.
A network of councils said that local shortfalls will hit £4.4bn a year by the end of the decade, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until the coming year after a white paper setting out those reforms was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest IMD measures,” noted the study.
“While only one key city is in the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of England. The data underscores the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the analysis added.
“Local government leaders have been clear about the need for a equitable and lasting financial structure that reflects and responds to the actual extent of deprivation and need,” said a council leader.
“Without this, councils will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
One in five of councils have reduced or weakened social care provision in the past 12 months, the survey revealed.
