According to a recent study of municipal councils, UK councils are preparing to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils representing second-tier cities in the UK stated that six out of ten of councils are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for disposing of playing fields and land to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or declare themselves bankrupt.
The group noted that a significant number of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders stated they would focus on restructuring services and using savings to manage growing fiscal pressures.”
Specific Cases of Proposed Sales
One local authority in southeast England said its asset disposal plan included the sale of a retail complex in a local town and a community venue in Rochester to generate 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will additionally be disposed of under the strategy.
Council Tax Increases and Broader Financial Pressures
This research of local authorities in the coalition, which covers several urban centers, further found that more than 70% of councils will have to increase local levies next April to cover the growing cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of children services, special educational needs and disability (Send) provision, elderly and disability services, and temporary accommodation.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and financial savings,” said Vince Maple.
He continued: “We face population challenges which will persist to increase 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.”
Countrywide Trends and Forecasts
Research of regional authorities recently also found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will hit £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until next year after a policy document setting out those reforms was recently delayed.
Disadvantage and Financial Shortfalls
Based on the latest indices of deprivation (the Index of Multiple Deprivation) covering UK local authorities, several key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest deprivation indices,” said the study.
“Although only one key city is in the top 10 for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The data underscores the extent of difficulties confronting municipal officials across major urban centers in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting financial structure that reflects and addresses the real levels of deprivation and need,” said Michael Mordey.
“Without this, councils will persist to face difficult decisions around which essential services to allocate spend to, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised care services in the last year, the study revealed.
