Based on a new poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for major urban areas in England stated that six out of ten of councils are intending to sell assets to cover the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling playing fields and open spaces to support their finances, but they contend they must continue to generate essential revenue from property disposals or face insolvency.
The group said that a high proportion of authorities seeking to generate funds from a fire sale of assets marked “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Specific Examples of Planned Disposals
Medway Council in southeast England said its property management strategy included the disposal of a shopping centre in a local town and a social club in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all generate rent for the authority, will also be disposed of under the strategy.
Local Levy Rises and Broader Fiscal Pressures
This research of councils in the key cities group, which includes several urban centers, further found that over seven in ten of authorities will need to raise local levies next April to address the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
Medway council explained it will proceed with asset sales after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking innovative approaches but certain measures require time to achieve both improved services and cost efficiency,” said Vince Maple.
He continued: “We face demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Projections
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals needing Send support.
The County Councils Network projected that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until next year after a policy document setting out those reforms has been postponed.
Disadvantage and Financial Gaps
Based on the latest indices of deprivation (IMD) covering UK local authorities, many participating urban areas were among the most deprived in England.
- “Member cities 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 top 10 for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” stated a council leader.
“Without this, councils will persist to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their residents.”
One in five of councils have reduced or weakened social care provision in the last year, the survey revealed.
