Based on a new study of municipal councils, 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.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are planning to sell assets to cover the rising costs of social services for vulnerable individuals.
Councils have in the past come under fire for disposing of playing fields and open spaces to shore up their budgets, but they argue they must continue to raise vital cash from property disposals or face insolvency.
This coalition noted that a significant number of authorities seeking to raise money from a quick sale of holdings represented “a distinct shift from 2024, when the largest share (60%) of municipal officials said they would focus on restructuring services and using savings to weather growing financial challenges.”
Detailed Examples of Proposed Disposals
One local authority in southeast England announced its asset disposal plan featured the sale of a shopping centre in a local town and a community venue in Rochester to raise £20m over five years.
- Gillingham golf club and commercial properties owned in two English counties, which all provide rental income for the authority, will additionally be sold under the strategy.
Council Tax Rises and Broader Fiscal Pressures
This research of local authorities in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will have to raise council taxes next April to cover the rising cost of essential services, increased rates of homelessness, and a persistent accommodation deficit.
The authority explained it will press ahead with property disposals after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and temporary accommodation.
“We are adopting innovative approaches but some of these require time to deliver both better provisions and cost efficiency,” stated a council leader.
He continued: “We face population challenges which will continue to add to the pressures we have. As a unitary authority, we had a 91% cut in our central funding from 2010-24, which is very challenging.”
Countrywide Trends and Projections
A survey of regional authorities this week also found council budgets being strained by the growing number of children and older individuals requiring Send support.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to cope with rising needs.
Ministers have delayed scheduled changes to the special educational needs framework until the coming year after a policy document outlining those changes has been postponed.
Disadvantage and Financial Shortfalls
According to the latest deprivation measures (IMD) for UK local authorities, several participating urban areas were included in the most disadvantaged in the country.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only a single urban area is among the ten most deprived for deprived neighbourhoods nationally, urban areas are much more prone to be in the worst-off 20% of the nation. The data underscores the extent of difficulties confronting municipal officials across key cities in the coming year,” the report added.
“Local government leaders have been clear about the necessity for a equitable and lasting financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, councils will continue to face difficult decisions around which essential services to fund, and which to cut, to the detriment of their communities.”
A fifth of local authorities have cut or compromised social care provision in the past 12 months, the study found.
