According to a latest poll of municipal councils, UK councils are planning to offload community centers, sports centres, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Fiscal Pressures Drive Asset Sales
The Key Cities Group representing second-tier cities in the UK reported that 60% of councils are intending to dispose of properties to meet the escalating costs of adult and children’s social care.
Councils have in the past faced criticism for selling public land and land to support their finances, but they contend they must proceed to generate essential revenue from property disposals or face insolvency.
The group noted that a significant number of councils attempting to generate funds from a fire sale of assets represented “a distinct shift from 2024, when the majority (six in ten) of local leaders said they would prioritise restructuring services and utilising financial reserves to manage growing fiscal pressures.”
Specific Cases of Planned Sales
Medway Council in southeast England said its asset disposal plan featured the disposal of a shopping centre in a local town and a social club in Rochester to raise 20 million pounds over the next half-decade.
- Gillingham golf club and business parks owned in two English counties, which all provide rental income for the authority, will also be disposed of under the strategy.
Council Tax Increases and Broader Fiscal Strains
This research of councils in the key cities group, which includes Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to raise local levies next April to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
The authority explained it will proceed with asset sales after steep rises in the cost of youth support, special educational needs and disability (Send) provision, elderly and disability services, and short-term housing.
“We are taking innovative approaches but certain measures take time to achieve both better provisions and cost efficiency,” said a council leader.
He continued: “There are population challenges which will continue to add to the pressures we have. As a local government body, we had a drastic reduction in our central funding from 2010-24, which is extremely difficult.”
Countrywide Trends and Projections
A survey of regional authorities this week also found council budgets being stretched by the increasing figures of children and adults requiring Send support.
The County Councils Network said that council deficits will hit £4.4bn a year by the end of the decade, as they grapple to cope with increased demand.
Government officials have put off planned reforms to the special educational needs framework 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 (IMD) covering UK local authorities, many key cities members were included in the most disadvantaged in England.
- “Member cities like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton place in the most deprived 30 across the country under the latest IMD measures,” said the report.
“Although only one key city is among the ten most deprived for deprived neighbourhoods countrywide, cities are much more prone to be in the most deprived fifth of England. The data highlights the scale of difficulties facing municipal officials across key cities in the coming year,” the report concluded.
“Local government leaders have been explicit about the need for a fair and sustainable funding system that accounts for and responds to the actual extent of disadvantage and need,” stated a council leader.
“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 residents.”
One in five of councils have cut or compromised social care provision in the last year, the survey revealed.
