According to a new survey of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to balance the books.
Increasing Financial Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that six out of ten of local authorities are planning to sell assets to cover the escalating costs of adult and children’s social care.
Councils have previously come under fire for disposing of public land and land to shore up their budgets, but they argue they must proceed to raise vital cash from property disposals or face insolvency.
The group said that a significant number 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 municipal officials said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Specific Cases of Planned Sales
One local authority in southeast England said its asset disposal plan featured the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all provide rental income for Medway council, will also be sold under the plan.
Council Tax Rises and Broader Fiscal Pressures
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a longstanding housing shortage.
The authority said it will proceed with asset sales after sharp increases in the cost of children services, special educational needs and disability (Send) provision, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both better provisions and financial savings,” stated Vince Maple.
He continued: “We face population challenges which will persist to add to the pressures we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being strained by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by the end of the decade, as they grapple to manage increased demand.
Government officials have put off scheduled changes to the Send system until the coming year after a white paper setting out those changes was recently delayed.
Disadvantage and Funding Gaps
According to the latest indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most deprived in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the top 10 for disadvantaged communities nationally, cities are far more likely to be in the most deprived fifth of England. The figures underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a equitable and lasting funding system that accounts for and responds to the real levels of deprivation and need,” said Michael Mordey.
“Lacking this, local authorities 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 cut or compromised social care provision in the last year, the survey revealed.
