Based on a new poll of municipal councils, UK councils are planning to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Fiscal Challenges Drive Asset Sales
The Key Cities Group for major urban areas in the UK stated that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Councils have previously faced criticism for disposing of public land and open spaces to support their finances, but they argue they must continue to generate essential revenue from asset sales or declare themselves bankrupt.
This coalition said that a high proportion of authorities attempting to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising financial reserves to weather increasing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent said its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate £20m over five years.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will additionally be sold under the strategy.
Council Tax Increases and Wider Fiscal Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of councils will need to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are taking innovative approaches but some of these require time to deliver both better provisions and financial savings,” said a council leader.
He continued: “We face demographic pressures which will persist to increase the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
National Trends and Forecasts
Research of regional authorities this week further found council budgets being stretched by the growing number of young people and adults requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a white paper outlining those reforms was recently delayed.
Deprivation and Financial Gaps
According to the latest indices of deprivation (IMD) covering UK local authorities, several key cities members were among the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“While only one key city is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the worst-off 20% of the nation. The data highlights the scale of challenges facing municipal officials across key cities in the next twelve months,” the analysis concluded.
“Council officials have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” said Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to allocate spend to, and which to reduce, to the detriment of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
