Based on a new poll of municipal councils, UK councils are preparing to sell community centers, athletic facilities, and retail spaces as they bet on a fire sale of assets to stabilize finances.
Increasing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in England reported that 60% of local authorities are intending to sell assets to meet the rising costs of social services for vulnerable individuals.
Councils have previously come under fire for selling playing fields and open spaces to support their budgets, but they contend they must continue to raise vital cash from asset sales or declare themselves bankrupt.
The group noted that a high proportion of authorities seeking to generate funds from a quick sale of assets marked “a distinct shift from 2024, when the majority (60%) of municipal officials said they would focus on service redesigns and using savings to weather increasing fiscal pressures.”
Detailed Examples of Planned Disposals
Medway Council in Kent said its property management strategy included the sale of a shopping centre in a local town and a social club in Rochester to generate £20m over the next half-decade.
- A local golf course and commercial properties owned in Worcestershire and Suffolk, which all generate rent for the authority, will additionally be disposed of under the strategy.
Council Tax Rises and Broader Financial Strains
The survey of councils in the key cities group, which covers Sunderland, Southampton, Gloucester and Salford, further found that over seven in ten of authorities will have to raise council taxes next spring to address the rising cost of core provisions, higher levels of homelessness, and a persistent housing shortage.
Medway council said it will proceed with asset sales after sharp increases in the cost of children services, support for vulnerable learners, adult social care, and short-term housing.
“We are adopting innovative approaches but certain measures take time to achieve both improved services and cost efficiency,” stated a council leader.
He added: “There are population challenges which will persist 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.”
National Trends and Projections
Research of county councils this week also found local finances being stretched by the increasing figures of young people and older individuals requiring special educational assistance.
The County Councils Network said that council deficits will reach £4.4bn a year by 2029, as they struggle to manage rising needs.
Ministers have delayed planned reforms to the Send system until the coming year after a policy document outlining those reforms has been postponed.
Deprivation and Funding Gaps
Based on the latest deprivation measures (the Index of Multiple Deprivation) covering 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 place in the top 30 nationally under the latest deprivation indices,” noted the report.
“Although only one key city is among the top 10 for deprived neighbourhoods nationally, cities are much more prone to be in the worst-off 20% of England. The data underscores the extent of difficulties facing local leaders across major urban centers in the next twelve months,” the report concluded.
“Council officials have been clear about the necessity for a fair and sustainable funding system that reflects and addresses the actual extent of disadvantage and demand,” said Michael Mordey.
“Without this, local authorities will continue to face impossible choices around which essential services to allocate spend to, and which to cut, to the disadvantage of their communities.”
A fifth of local authorities have reduced or weakened care services in the last year, the study found.
