Based on a latest survey of municipal councils, UK councils are planning to sell community centers, sports centres, and shopping arcades as they bet on a fire sale of assets to balance the books.
Growing Fiscal Pressures Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of councils are intending to dispose of properties to cover the rising costs of adult and children’s social care.
Councils have previously come under fire for disposing of playing fields and land to shore up their budgets, but they contend they must continue to raise vital cash from asset sales or face insolvency.
This coalition noted that a significant number of councils attempting to raise money from a quick sale of holdings marked “a clear change from 2024, when the largest share (six in ten) of municipal officials stated they would focus on restructuring services and utilising financial reserves to manage growing financial challenges.”
Detailed Examples of Planned Sales
One local authority in Kent announced its property management strategy included the sale of a shopping centre in Rainham and a community venue in another town to raise £20m over the next half-decade.
- A local golf course and business parks owned in two English counties, which all generate rent for the authority, will also be sold under the strategy.
Local Levy Increases and Wider Financial Strains
The survey of local authorities in the key cities group, which covers several urban centers, further found that over seven in ten of authorities 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.
The authority explained it will press ahead with asset sales after sharp increases in the cost of youth support, support for vulnerable learners, adult social care, and short-term housing.
“We are taking creative strategies but certain measures require time to deliver both better provisions and cost efficiency,” stated Vince Maple.
He continued: “There are population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Projections
A survey of regional authorities recently also found local finances being strained by the growing number of young people and adults needing Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have put off scheduled changes to the special educational needs framework until the coming year after a white paper setting out those changes was recently delayed.
Deprivation and Funding Shortfalls
According to the most recent indices of deprivation (IMD) for English councils, several key cities members were among the most disadvantaged in England.
- “Member cities like several major towns place in the top 30 across the country under the latest deprivation indices,” said the report.
“While only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, cities are far more likely to be in the worst-off 20% of England. The figures underscores the scale of challenges confronting local leaders across key cities in the coming year,” the analysis concluded.
“Council officials have been clear about the need for a fair and sustainable financial structure that accounts for and addresses the real levels of deprivation and need,” stated a council leader.
“Lacking this, local authorities will persist to face impossible choices around which vital provisions to fund, and which to cut, to the detriment of their residents.”
One in five of councils have reduced or weakened care services in the past 12 months, the survey revealed.
