According to a recent survey of local authorities, UK councils are preparing to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for major urban areas in England reported that six out of ten of councils are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously faced criticism for disposing of public land and land to shore up their finances, but they argue they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of local leaders said they would focus on service redesigns and utilising financial reserves to manage increasing fiscal pressures.”
Detailed Cases of Planned Sales
One local authority in Kent announced its property management strategy included the disposal of a retail complex in a local town and a community venue in another town to generate £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for Medway council, will additionally be sold under the strategy.
Local Levy Increases and Wider Fiscal Strains
The survey of councils in the key cities group, which includes several urban centers, also found that more than 70% of councils will need to increase local levies next April to cover the rising cost of core provisions, increased rates of homelessness, and a persistent housing shortage.
The authority said it will press ahead with asset sales after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will continue to increase the strains we have. As a local government body, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Trends and Forecasts
A survey of county councils recently further found council budgets being strained by the growing number of young people and older individuals requiring special educational assistance.
A network of councils said that council deficits will reach £4.4bn a year by 2029, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the Send system until the coming year after a policy document setting out those reforms has been postponed.
Deprivation and Funding Shortfalls
Based on the latest deprivation measures (IMD) for English councils, several participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the top 30 nationally under the latest deprivation indices,” noted the study.
“Although only one key city is in the top 10 for disadvantaged communities countrywide, cities are much more prone to be in the worst-off 20% of England. The figures underscores the scale of difficulties confronting local leaders across major urban centers in the coming year,” the report concluded.
“Local government leaders have been clear about the need for a fair and sustainable funding system that reflects and responds to the actual extent of disadvantage and need,” said a council leader.
“Lacking this, councils will continue to face impossible choices around which vital provisions to allocate spend to, and which to cut, to the disadvantage of their residents.”
A fifth of local authorities have cut or compromised social care provision in the last year, the survey found.
