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 balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group for second-tier cities in the UK stated that 60% of local authorities are intending to dispose of properties to meet the escalating costs of social services for vulnerable individuals.
Councils have previously faced criticism for disposing of playing fields and land to support their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition said that a high proportion of councils attempting to raise money from a fire sale of assets marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on service redesigns and utilising savings to weather growing fiscal pressures.”
Detailed Cases of Planned Disposals
Medway Council in southeast England announced its property management strategy included the disposal of a shopping centre in Rainham and a community venue in another town to raise £20m over five years.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will have to increase council taxes next spring to cover the rising cost of essential services, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are taking innovative approaches but some of these take time to achieve both better provisions and financial savings,” stated a council leader.
He continued: “There are population challenges which will continue to increase the pressures we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Patterns and Forecasts
Research of regional authorities recently further found local finances being strained by the increasing figures of children and older individuals needing Send support.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they struggle to cope with increased demand.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (IMD) for English councils, many participating urban areas were included in the most deprived in England.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” said the report.
“Although only a single urban area is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of challenges confronting local leaders across major urban centers in the coming year,” the report added.
“Council officials have been clear about the necessity for a equitable and lasting funding system that reflects and responds to the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will continue to face difficult decisions around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised care services in the past 12 months, the survey found.
