Based on a new study of local authorities, UK councils are planning to offload community centers, athletic facilities, and shopping arcades as they bet on a fire sale of assets to balance the books.
Increasing Financial Challenges Prompt Asset Sales
A coalition of councils for major urban areas in the UK reported that 60% of local authorities are planning to dispose of properties to cover the rising costs of adult and children’s social care.
Local governments have previously faced criticism for selling playing fields and land to shore up their finances, but they argue they must continue to generate essential revenue from asset sales or face insolvency.
This coalition noted that a high proportion of authorities seeking to raise money from a fire sale of assets represented “a distinct shift from 2024, when the majority (60%) of local leaders said they would focus on restructuring services and using savings to manage increasing fiscal pressures.”
Specific Examples of Proposed Sales
One local authority in Kent announced its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in Rochester to raise £20m over five years.
- A local golf course and business parks owned in Worcestershire and Suffolk, which all generate rent for Medway council, will additionally be disposed of under the plan.
Local Levy Rises and Wider Financial Pressures
This research of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, also found that more than 70% of authorities will have to raise local levies next April to address the rising cost of core provisions, higher levels of housing insecurity, and a longstanding accommodation deficit.
The authority said it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures take time to achieve both improved services and financial savings,” stated Vince Maple.
He added: “There are population challenges which will continue to add to the strains we have. As a unitary authority, we had a drastic reduction in our revenue support grant from 2010-24, which is extremely difficult.”
Countrywide Patterns and Forecasts
A survey of regional authorities recently further found local finances being stretched by the increasing figures of children and adults requiring Send support.
A network of councils said that council deficits will hit £4.4bn a year by the end of the decade, as they struggle to manage increased demand.
Ministers have put off planned reforms to the special educational needs framework until next year after a policy document outlining those reforms was recently delayed.
Disadvantage and Financial Gaps
According to the most recent deprivation measures (IMD) covering UK local authorities, several participating urban areas were included in the most disadvantaged in England.
- “Participating urban centers like several major towns rank in the most deprived 30 nationally under the latest IMD measures,” noted the study.
“Although only a single urban area is in the top 10 for disadvantaged communities nationally, 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 major urban centers in the next twelve months,” the report concluded.
“Council officials 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 a council leader.
“Without this, councils will persist to face difficult decisions around which vital provisions to fund, and which to cut, to the disadvantage of their residents.”
One in five of local authorities have cut or compromised care services in the last year, the study found.
