According to a recent poll of local authorities, UK councils are preparing to offload community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Growing Fiscal Challenges Prompt Asset Sales
The Key Cities Group representing second-tier cities in England stated that 60% of councils are intending to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of public land and land to shore up their finances, but they argue they must continue to generate essential revenue from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would prioritise service redesigns and utilising financial reserves to manage growing financial challenges.”
Specific Examples of Proposed Sales
Medway Council in southeast England announced its property management strategy featured the sale of a shopping centre in a local town and a community venue in Rochester to generate 20 million pounds over five years.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Rises and Wider Fiscal Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of authorities will need to increase local levies next April to address the growing cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are taking innovative approaches but some of these take time to deliver both improved services and financial savings,” stated Vince Maple.
He added: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Projections
A survey of regional authorities this week also found council budgets being strained by the increasing figures of children and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will hit £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a white paper setting out those reforms has been postponed.
Disadvantage and Funding Gaps
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for English councils, several key cities members were included in the most deprived in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only one key city is in the ten most deprived for disadvantaged communities countrywide, cities are much more prone to be in the most deprived fifth of England. The data underscores the extent of challenges facing municipal officials across key cities in the coming year,” the report added.
“Council officials have been explicit about the need for a fair and sustainable funding system that reflects and responds to the real levels of disadvantage and need,” stated Michael Mordey.
“Lacking this, local authorities will continue to face impossible choices around which vital provisions to fund, and which to cut, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
