Based on a new survey of local authorities, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
A coalition of councils representing second-tier cities in the UK reported 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.
Local governments have in the past come under fire for selling playing fields and open spaces to shore up their finances, but they contend they must proceed to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of councils seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the majority (60%) of municipal officials said they would prioritise restructuring services and using financial reserves to weather growing financial challenges.”
Detailed Cases of Planned Disposals
One local authority in southeast England said its asset disposal plan included the disposal of a shopping centre in a local town and a social club in Rochester to raise £20m over the next half-decade.
- A local golf course and commercial properties held in two English counties, which all provide rental income for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Wider Financial Strains
This research of councils in the coalition, which covers several urban centers, also found that more than 70% of authorities will need to raise council taxes next spring to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will press ahead with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are adopting creative strategies but some of these require time to deliver both improved services and financial savings,” said a council leader.
He added: “We face demographic pressures which will continue 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 very challenging.”
Countrywide Trends and Projections
Research of regional authorities recently further found local finances being stretched by the increasing figures of young people and adults 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 increased demand.
Government officials have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
According to the most recent deprivation measures (IMD) covering English councils, several participating urban areas were among the most deprived in the country.
- “Participating urban centers like several major towns place in the most deprived 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is in the ten most deprived for disadvantaged communities nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of challenges facing municipal officials across key cities in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of disadvantage and need,” said a council leader.
“Without this, councils will persist to face difficult decisions around which essential services to fund, 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.
