According to a recent poll of local authorities, UK councils are preparing to offload community centers, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Increasing Fiscal Pressures Prompt Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of local authorities are planning to sell assets to meet the rising costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to support their budgets, but they contend they must proceed to raise vital cash from property disposals or declare themselves bankrupt.
This coalition said that a significant number of councils attempting to raise money from a quick sale of holdings represented “a clear change from 2024, when the largest share (60%) of municipal officials stated they would prioritise restructuring services and using savings to manage growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in Kent announced its asset disposal plan included the disposal of a retail complex in Rainham and a community venue in another town to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Local Levy Increases and Broader Fiscal Pressures
The survey of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, also found that over seven in ten of authorities will need to increase council taxes next April to cover the growing cost of core provisions, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these take time to deliver both better provisions and cost efficiency,” said Vince Maple.
He added: “We face demographic pressures which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our revenue support grant from 2010-24, which is very challenging.”
National Trends and Forecasts
A survey of county councils this week also found council budgets being strained by the increasing figures of children and adults requiring Send support.
A network of councils projected that local shortfalls will reach £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed planned reforms to the Send system until next year after a white paper outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the latest deprivation measures (the Index of Multiple Deprivation) for UK local authorities, many key cities members were included in the most deprived in England.
- “Participating urban centers like several major towns place in the top 30 across the country under the latest IMD measures,” said the study.
“Although only one key city is among the top 10 for deprived neighbourhoods countrywide, urban areas are far more likely to be in the most deprived fifth of the nation. The figures highlights the extent of difficulties facing municipal officials across major urban centers in the coming year,” the report added.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that reflects and addresses the real levels of deprivation and need,” said a council leader.
“Lacking this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the survey found.
