According to a new study of local authorities, UK councils are planning to offload community centers, athletic facilities, and retail spaces as they rely on a fire sale of assets to balance the books.
Growing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing major urban areas in England reported that 60% of local authorities are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
The group said that a significant number of councils seeking to raise money from a fire sale of holdings marked “a distinct shift from 2024, when the majority (60%) of local leaders stated they would focus on service redesigns and using savings to manage increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in southeast England said its asset disposal plan included the sale of a shopping centre in Rainham and a community venue in Rochester to generate £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all generate rent for the authority, will also be disposed of under the plan.
Council Tax Increases and Broader Financial Pressures
The survey of local authorities in the key cities group, which covers several urban centers, also found that over seven in ten of councils will have to raise local levies next April to address the rising cost of essential services, higher levels of housing insecurity, and a longstanding housing shortage.
Medway council explained it will press ahead with property disposals after steep rises in the cost of children services, support for vulnerable learners, elderly and disability services, and short-term housing.
“We are adopting innovative approaches but some of these require time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a 91% cut in our central funding from 2010-24, which is extremely difficult.”
National Patterns and Forecasts
Research of county councils recently further found local finances being strained by the increasing figures of young people and older individuals needing special educational assistance.
The County Councils Network projected that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Ministers have put off planned reforms to the Send system until next year after a policy document setting out those changes was recently delayed.
Disadvantage and Financial Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) for UK local authorities, several participating urban areas were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the top 30 nationally under the latest deprivation indices,” said the report.
“Although only one key city is among the ten most deprived for disadvantaged communities countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The figures underscores the scale of difficulties confronting 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 accounts for and addresses the actual extent of deprivation and demand,” stated Michael Mordey.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to reduce, to the disadvantage of their communities.”
A fifth of councils have cut or compromised social care provision in the past 12 months, the study revealed.
