Based on a latest poll 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.
Increasing Fiscal Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that six out of ten of local authorities are planning to sell assets to meet the rising costs of social services for vulnerable individuals.
Local governments have previously come under fire for disposing of playing fields and open spaces to shore up their finances, but they argue they must proceed to raise vital cash from asset sales or declare themselves bankrupt.
This coalition noted that a significant number of authorities seeking to raise money from a fire sale of holdings represented “a clear change from 2024, when the majority (six in ten) of local leaders stated they would prioritise restructuring services and utilising savings to manage growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in southeast England said its asset disposal plan included the sale of a shopping centre in a local town and a community venue in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks held in two English counties, which all generate rent for Medway council, will additionally be disposed of under the strategy.
Local Levy Increases and Broader Financial Strains
This research of local authorities in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of councils will need to increase council taxes next April to address the rising cost of essential services, higher levels of housing insecurity, and a persistent housing shortage.
Medway council explained it will proceed with property disposals after sharp increases in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking creative strategies but some of these require time to achieve both improved services and cost efficiency,” said a council leader.
He continued: “We face population challenges which will persist to add to the pressures we have. As a unitary authority, we had a drastic reduction in our central funding from 2010-24, which is very challenging.”
National Patterns and Forecasts
A survey of county councils this week further found local finances being strained by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network projected that local shortfalls will reach £4.4bn a year by 2029, as they struggle to manage increased demand.
Ministers have delayed planned reforms to the Send system until the coming year after a white paper outlining those changes has been postponed.
Deprivation and Funding Gaps
Based on the latest indices of deprivation (IMD) covering English councils, many key cities members were among the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is among the top 10 for deprived neighbourhoods countrywide, cities are far more likely to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting local leaders across key cities in the next twelve months,” the report added.
“Council officials have been clear about the necessity for a fair and sustainable financial structure that accounts for and responds to the real levels of deprivation and demand,” said a council leader.
“Without this, local authorities will persist to face difficult decisions around which vital provisions to fund, and which to reduce, to the disadvantage of their residents.”
A fifth of councils have cut or compromised care services in the last year, the study found.
