Based on a recent survey of local authorities, UK councils are planning to sell community centers, athletic facilities, and shopping arcades as they rely on a fire sale of properties to balance the books.
Increasing Financial Challenges Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that six out of ten of councils are intending to sell assets to cover the rising costs of adult and children’s social care.
Local governments have in the past come under fire for selling playing fields and land to support their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition said that a significant number of authorities attempting to generate funds from a fire sale of holdings represented “a clear change from 2024, when the majority (60%) of local leaders said they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in southeast England announced its property management strategy featured the sale of a retail complex in a local town and a community venue in Rochester to raise £20m over the next half-decade.
- A local golf course and business parks held in two English counties, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Increases and Wider Fiscal Pressures
The survey of councils in the coalition, which includes Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of councils will need to increase local levies next April to cover the rising cost of essential services, increased rates of homelessness, and a longstanding accommodation deficit.
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, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but some of these take time to achieve both better provisions and financial savings,” said a council leader.
He continued: “There are demographic pressures which will persist to add to 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.”
Countrywide Trends and Projections
A survey of regional authorities this week further found local finances being stretched by the increasing figures of young people and older individuals needing special educational assistance.
A network of councils said that local shortfalls will reach £4.4bn a year by 2029, as they grapple to manage rising needs.
Ministers have delayed planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Funding Gaps
According to the most recent indices of deprivation (IMD) for UK local authorities, many key cities members were included in the most disadvantaged in the country.
- “Member cities like several major towns rank in the top 30 across the country under the latest deprivation indices,” noted the study.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the worst-off 20% of the nation. The figures underscores the extent of difficulties confronting local leaders across key cities in the next twelve months,” the analysis added.
“Council officials have been explicit about the necessity for a fair and sustainable financial structure that accounts for and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face difficult decisions around which essential services 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 past 12 months, the study revealed.
