Based on a new survey of municipal councils, UK councils are planning to offload social clubs, sports centres, and shopping arcades as they bet on a fire sale of properties to stabilize finances.
Growing Financial Pressures Prompt Asset Sales
A coalition of councils for second-tier cities in England stated that 60% of local authorities are planning to sell assets to meet the escalating costs of adult and children’s social care.
Councils have previously faced criticism for selling public land and open spaces to support their budgets, but they contend they must proceed to raise vital cash from asset sales or face insolvency.
The group noted that a high proportion of councils seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of municipal officials said they would focus on service redesigns and using financial reserves to weather increasing fiscal pressures.”
Specific Examples of Planned Sales
Medway Council in Kent announced its property management strategy featured the disposal of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over five years.
- A local golf course and business parks held in Worcestershire and Suffolk, which all provide rental income for the authority, will also be disposed of under the plan.
Local Levy Rises and Wider Financial Strains
This research of councils in the key cities group, which includes several urban centers, also found that more than 70% 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 proceed with property disposals after steep rises in the cost of children services, special educational needs and disability (Send) provision, adult social care, and temporary accommodation.
“We are taking creative strategies but some of these require time to deliver both improved services and financial savings,” stated Vince Maple.
He continued: “There are demographic pressures which will continue to add to the strains we have. As a local government body, we had a drastic reduction in our revenue support grant from 2010-24, which is very challenging.”
Countrywide Trends and Forecasts
Research of county councils this week also found council budgets being stretched by the growing number of children and older individuals requiring special educational assistance.
A network of councils projected that local shortfalls will hit £4.4bn a year by the end of the decade, as they struggle to manage rising needs.
Government officials have delayed scheduled changes to the Send system until next year after a policy document outlining those reforms has been postponed.
Disadvantage and Funding Shortfalls
Based on the most recent indices of deprivation (the Index of Multiple Deprivation) covering English councils, many participating urban areas were included in the most disadvantaged in the country.
- “Participating urban centers like several major towns place in the most deprived 30 across the country under the latest IMD measures,” noted the study.
“While only a single urban area is among the ten most deprived for disadvantaged communities nationally, urban areas are far more likely to be in the most deprived fifth of England. The data underscores the extent of challenges confronting local leaders across key cities in the coming year,” the analysis added.
“Local government leaders have been clear about the need for a fair and sustainable funding system that accounts for and addresses the real levels of disadvantage and need,” stated Michael Mordey.
“Without this, local authorities will persist to face impossible choices around which essential services to allocate spend to, and which to reduce, to the disadvantage of their communities.”
One in five of local authorities have reduced or weakened care services in the past 12 months, the survey revealed.
